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What do people mean when they say that ABCT is not about overinvestment but malinvestment. What would overinvestment look like if all investing takes the form of lengthening the structure of production? Basically any *investment* lengthens the structure of production. other than investment you have 'machine etc. maintenance' and 'machine
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don't want to start a FRB debate again, but I was wondering about one particular question: with life insurance companies make calculations about the premium they have to ask to have enough funds to pay out possible claims. There is a risk that their calculations are incorrect in which case they cannot pay out, at which point they can be sued/go
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Okay, now I'm not understanding it anymore. the Fed creates the securities? so how or why can it buy them from the government? And how then does the Fed create money to pay back the Fed itself? sorry, I'm not understanding
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okay, thanks for the answers so far. To be sure, my question is only about how the government profits from these deals, not so much how the Fed wants to influence the amount of money in circulation. The link in the first response addresses that question. In that thread it is stated that the Fed does not write off the government's debt, but that
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The whole process of money creation through central banking is still quite opaque to me. In particular I wonder about the following: if the Fed buys US government securities then the government needs to pay the Fed back at some point, no? If so, how does the government benefit from these transactions other than by being able to go into greater debt
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that last paragraph is an excellent description of the problem I'm concerned with.
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those are both good points: legal tender laws and Gresham's Law, and taxes . Incidentally they are the exact same points that somebody on an e-mail list just made, so independent verification. the other point that was made there was that e.g. the dollar has a severe advantage because it is currently being used and has been used in the past, whereas
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that's a good point yeah, that the allocation of the new currency will be based on the earlier dollar, or that it is completely cut off from the earlier dollar in which case the above might happen. actually, for my question, I think, the only thing that matters is whether a government could create a new money when there was none before (but it's
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yes, I grant all of that, but the question is whether it would not be more advantageous to use gold over fiat money in a society where fiat money has been established
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Okay, then I think I am just missing somethng: if government forces people to use those notes as payment and outlaws all other forms of payment, and if i for example get 1000 'prazdno' then if I want to buy something I will decide how I want to spend that 1000 prazdno, 20 for food, 100 for a car, etc. And other people will do the same. wouldn't