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[quote user="Harry Felker"] How much confidence do you have in a bank that has injected funds to keep it afloat? I do not have much, if they malinvested their money, what will they do with the government money? [/quote] Whether the bailout is going to work is not my question. What I am asking is that if injecting capital does keep some insolvent
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[quote user="Harry Felker"] [quote user="Erickk"]If they did not have to, they would not face the pressure to lend out the money, so that would not cause too much hyperinflationary pressure.[/quote] I do nto have to correct this, injecting money into the system will eventually blossom into a hyperinflationary event, I can't wait
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[quote user="Harry Felker"] [quote user="Erickk"]My question is that when it distributes the money to the commercial banks, do the banks later need to pay back the money??[/quote] That would require to look at the contract between the bank and the FED... I am sure it is like the arangement with the government, pay the interest, do
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[quote user="Harry Felker"]Distribute it like a crack dealer....[/quote] My question is that when it distributes the money to the commercial banks, do the banks later need to pay back the money??
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[quote user="Harry Felker"] [quote user="Erickk"]Sorry but I still did not get this, do you mean that this sort of wiretransfer still potentially create money?[/quote] Your money starts in a bank, your bank made loans off that money, those loans are not automatically paid off when your money is removed from the bank. So, when it
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[quote user="Pvincent87"] 1. The explosion in bank excess reserves 2. The fed's low interest rate under Greenspan since the early 80's. 3. The "flight into real goods" which will commence is inflation seems out of control to even a small portion of Americans 4. The fed's exploding balance sheet [/quote] It makes sense
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Milton Friedman is a great pro-free market economist. What he and Austrians have in common is that they both hate the Fed. To quote Milton Friedman in an interview by Reason Magazine, "the unsolved economic problem today is how to get rid of the Federal Reserve". However, Friedman is certainly much more practical. Read this quote, "difference
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[quote user="Harry Felker"]you bank already has loans based on that money, and now so does mine...[/quote] Sorry but I still did not get this, do you mean that this sort of wiretransfer still potentially create money? Additionally, the new $810k lent out based on the newly received money in your account is actually to be added to the lendee's
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[quote user="Harry Felker"]when you transfer it to me the bank treats it as a cash deposit, allowing it to make a loan, the original loan is 9 times 90% of the cash, approximately ($810k), [/quote] So actually if I wiretransfer to your account 100k, the money supply accordingly increased is 810k. It doesnt matter if it is being operated in
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[quote user="Harry Felker"] When you do this, My Bank has an increase of 100K in thier reserves, which opens them up to write a ~810k Loan, now when that loan is deposited, as it MUST BE before it can be spent, it is split 90%/10%, the 10% is taken as reserve by the bank for loan purpose, multiplied by 9 and made into a loan(s) ($729k) wash