Could the Weimar Hyperinflation Happen Again in America?

This is a discussion on Could the Weimar Hyperinflation Happen Again in America? within the Economic & Fundamental Analysis forums, part of the Methods category; who the hell is talking about the definition of what money is? im talking about money as a fiat currency ...

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Old Feb 24, 2010, 11:28pm   #491
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

who the hell is talking about the definition of what money is? im talking about money as a fiat currency and how it exists and is created by debt. you know, to go along with the post i made that you wrongly disputed.
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Old Feb 24, 2010, 11:31pm   #492
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

every single dollar in the system is owed to someone, by someone. this is undeniable FACT. (hence it says so on the bloody federal reserve note)
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Old Feb 24, 2010, 11:35pm   #493
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

you can bark on all day long about the definition of money as a unit of measured value and bla bla bla..doesnt change the fact that ALL money was created and exists as debt. so you want me to go over the mechanics again? a five year old could understand this stuff...
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Old Feb 24, 2010, 11:35pm   #494
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

Quote:
Originally Posted by N Rothschild View Post
who the hell is talking about the definition of what money is? im talking about money as a fiat currency and how it exists and is created by debt. you know, to go along with the post i made that you wrongly disputed.
You continue debating with your self - master...
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Old Feb 24, 2010, 11:37pm   #495
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

did you not get enough oxygen to the brain when your mother gave birth to you or what?
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Old Feb 25, 2010, 2:42am   #496
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

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Originally Posted by Atilla View Post
I don't dispute these points and they are possible. I would add that I think the Fed being unaccountable to Senate and under no other jurisdiction is a special case. Does such a system exist in any other country? Governments manage the central banks. Even if the BoE is independent from political influence it has to account for its actions to parliament.

I have no idea how the Fed can pass a bill for $800bn on 3 or 4 pages of A4 and not be accountable as to how that money is spent.
That was the Treasury, not the Fed.
You missed it at point number one.
One more time:

1 - Banking is a business.
2 - Like any other business, it is a profit-seeking enterprise.
3 - At banks, what is bought and sold is money. Banks buy money wholesale (what they pay you for a deposit) and sell it retail (what they charge you for a loan).
4 - If a major customer comes to a bank and says they want money, they're going to get it.
5 - Afterwards, the bank will worry about where to find that money.
6 - This action will increase the money in circulation.
7 - The Fed isn't about to say no to the bank.
8 - The money is created out of thin air.
9 - The debt burden to the economy increases.
10 - At some point, this becomes unsustainable, and collapses.

We're at 10. I really don't know how to make this any simpler. Go back and reread Keen (I'm assuming you read that link in the first place). Citing the multiplier is a sure sign you either haven't read it or don't understand it.
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Old Feb 25, 2010, 3:00am   #497
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

I'll try from a slightly different angle:

In the context, especially, of a nation that possesses the world's reserve currency, any reserve requirement that that country's central bank tries to enforce is going to be unenforceable.

This is the essence of the fiat currency problem.
I don't share the idea that fiat currencies cause instability; like Hyman Minsky, I think instability is inherent in capitalism, regardless of whether the currency is backed or not. But a global fiat currency regime has the problem that the country with the reserve currency has carte blanche to create as much debt, which means as much money, as it feels like. No getting around it.
While backed currencies cause instability through other avenues, fiat currencies have this as their central cause of instability, on a global scale.
The Fed is completely powerless to either abet or restrain this. The US government can only treat the symptom - joblessness - but not the cause, because the cause is a result of the strength of the US's private economy, which has zilch to do with the government, except that the government's undisputed monopoly on power allows it to enforce property rights, which is a priceless public good.
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Old Feb 25, 2010, 4:15am   #498
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

don't waste your breath guy is an ignoramus
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Old Feb 25, 2010, 11:27pm   #499
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

Quote:
Originally Posted by Benton D Struckcheon View Post
That was the Treasury, not the Fed.
You missed it at point number one.
One more time:

1 - Banking is a business.
2 - Like any other business, it is a profit-seeking enterprise.
3 - At banks, what is bought and sold is money. Banks buy money wholesale (what they pay you for a deposit) and sell it retail (what they charge you for a loan).
4 - If a major customer comes to a bank and says they want money, they're going to get it. My understanding is that the problem started when they started lending to minor customers who didn't have money in the first place. More a case of risk / credit control.
5 - Afterwards, the bank will worry about where to find that money.
6 - This action will increase the money in circulation.
7 - The Fed isn't about to say no to the bank. They said no to Lehman's didn't they???
8 - The money is created out of thin air.
9 - The debt burden to the economy increases.
10 - At some point, this becomes unsustainable, and collapses.

We're at 10. I really don't know how to make this any simpler. Go back and reread Keen (I'm assuming you read that link in the first place). Citing the multiplier is a sure sign you either haven't read it or don't understand it.

So how does the US government or Fed control the Banks then?

I haven't read all the links posted up here no. I was busy watching the new paint dry in my loo...

I do understand the fractional reserve system thanks. Problem is some people are shouting and not listening...

So what is the difference between the multiplier effect and banks ability to raise loans using the same money that is deposited with them? I trust we are not debating jargon use of words here...


I have so much debt in my bank account I think I better go an earn some more debt to pay my debt back... Which will only mean I have more debt so I need to earn more debt to pay more of my debt back. Cradle to grave...

I know I know it says so on the US dollar bill. It must be debt I'm working for.

I know I'll sell all my assets so I can have more debt...


Forgive me BDS but I do appreciate the subtle differences of our differences unlike some people.

I must go as time is debt. Mustn't create more debt.
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Old Feb 25, 2010, 11:32pm   #500
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

see this is where your small brain cant work it out. for every dollar/pound you have in the bank..someone else needs that to pay back a loan/creditcard etc. few people have more cash than they have debt, and if you do, then someone else needs that money to pay back there debts. capiche? you maybe have 100k in your bank acount and no debts, but for every person with 100k in the bank there is probably 100 people who OWE 100k on there mortgage.

it is what devides the rich from the poor. the rich have something the poor need, the CASH to pay back there debts.
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