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23 February 2017

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William R. Cumming

TO ANSWER MY OWN QUESTION RE: FREEDOM OF THE PRESS!

PETER ZENGER DURING COLONIAL RULE HELPED LEAD TO press freedom.


The Press is often wrong and only passage of time theoretically leads to correction. But of what? Hopefully facts but passage of time seldom corrects OPINION. whether ALL OF MSM QUALIFIES AS THE press REMAINS FOR JUDICIAL INQUIRY IMO!

But what really irks the MSM is so much of the talking heads commentary is opinion not fact and TRUMP threatens that distinction by labeling all opinion.

MORNING JOE survives on opinion not facts IMO!

William R. Cumming

Agree with this comment!

William R. Cumming

Agree with your comment!

William R. Cumming

A really great comment IMO! One possible reform merging SEC and IRS accounting also IMO!

William R. Cumming

Interesting! I would argue that under English law, London and England one entity! That what BREXIT really about IMO!

Jack

"No they can’t. It is against the law for US dollars to leave the US banking system. Period."

Wrong.

There's billions of US dollars as cash all over the world. There's eurodollars and USD bank deposits in other countries. I have a multi-currency bank account in Singapore where I can park in USD.

http://www.investopedia.com/terms/e/eurodollar.asp

You pontificate like you're some expert and call highly respected by their peers folks idiots but some of what you post here on macro financial matters is fundamentally incorrect and misleading.

Let me give another example:

You write, "A physical dollar, that piece of paper in your wallet, is just a treasury security". This is plain wrong. Have you ever looked at a physical dollar bill? You will notice that it is a note of the Federal Reserve NOT a US Treasury security. They are two different entities.

different clue

Jack,

Are our metal coins still US Treasury Securities? If one can call something as small as a quarter or a dime to be a "security". The point of the question being . . . are the metal coins strictly U S Treasury? As aGAINST being Federal Reserve?

different clue

VietnamVet,

hmmm. . . HMMmmm! Now that I know I correctly understand that, I am not sure that I like it.

I somehow suspect that squashing three already-big countries into one super huge country would be creating the political geographic equivalent of an ultra-heavy super-unstable atomic nucleus. I think if we pushed our three countries into one huge chunk of Mexamericanadium . . . that the huge chunk would go supercritical and fissionize into numerous small countries much ill-will and perhaps even some India-Pakistan-partition style mega massacres of people fleeing to their own side of various lines.

Babak Makkinejad

Qajars currency was based on silver; when the silver prices collapsed due to the out put of silver mines in the New World, the fiscal crisis of the Iranian state was started.

Unfortunately, the Marco-economic device of printing money and issuing bonds had not yet been invented; had it been available and had it been adopted by the Qajar Treasury, they likely would have still been in power.

MRW

LeaNder, [Sorry, didn’t see this before]

Yes, good overview, except the opening paragraph uses language that uses the sort of words that will confuse people overall. No one is really lending money to the federal government.:

"U.S. Treasury securities—such as bills, notes and bonds—are debt obligations of the U.S. government. When you buy a U.S. Treasury security, you are lending money to the federal government for a specified period of time."

Let’s put it on the side of the economy where users of the currency live, the microeconomic world:

When you buy a CD from your bank [what we call here in America a Certificate of Deposit, don’t know about Germany, here it’s the name for a savings instrument that pays a higher yield, or higher interest rate, within a specified time limit], when an average person buys a CD, by the same token as in the italicized paragraph above, you are lending the bank money for a specified period of time.

These two things are exactly the same. In each instance you are taking your savings and exchanging them for a different kind of asset.

In the first instance, the treasury security is an IOU from the federal government. In the second instance, the CD is an IOU from your local bank.

In the first instance, the federal government promises to repay your savings at a later time with interest.

In the second instance, your local bank promises to repay your savings at a later time with interest.

Same thing, with one crucial difference:

In the first instance, the federal government doesn’t have to earn the revenue required to repay you and with interest over the next possible 30 years. It CREATES THE CURRENCY USED IN THE TRANSACTION.

In the second instance, the local bank has to retain a federally mandate reserve, or % of the deposit, in order to guarantee that you will be repaid with interest, and must have earned enough revenue to pay the interest, when you want your money back. THE BANK MUST EARN THE CURRENCY USED IN THE TRANSACTION.

This short video [5 min] created by the Bank of England shows how the exact same thing works in England which, too, creates its own currency. Sometimes easier to understand this stuff when you can see it from afar.
https://www.youtube.com/watch?v=ziTE32hiWdk

By comparison, Germany no longer creates it’s own currency. Both its federal government AND its citizens must earn Euros to meet their present obligations. Germany forfeited its sovereignty when it gave up the Deutschmark. Luckily it landed on its feet after the adoption of the Euro; Greece, Spain, and Italy did not, mainly because Germany beat them to market. That all changes if France decides to leave the EU and return to the Franc.

MRW

Fred, I’m trying to explain that people use the same language for operations (transactions) that are completely opposite. Same language used for public (govt) and private (citizen) operations, but they mean different things.

MRW

Jack, you write, "Have you ever looked at a physical dollar bill? You will notice that it is a note of the Federal Reserve NOT a US Treasury security. They are two different entities."

Ok. Take a dollar out of your wallet right now. Who signed it?

The Secretary of the Treasury.

What does it say to the left of that?

"This note is legal tender for all debts public and private.”

The dollar bill you’re holding is an IOU to you from the US Treasury. But it doesn’t pay you interest just because you’re holding it, does it?

If, however, you held a treasury security bill, note, or bond, you’d get interest on it. Still an IOU to you.

That’s what I mean by it’s a treasury security with zero maturity.

I responded late to an article LeaNder cited above a few minutes ago, and suggested she watch a Bank of England five-minute video describing the same thing as I’m explaining above, only from the British POV. Britain is a sovereign currency issuer just like we are. it’s called "Money in the modern economy: an introduction - Quarterly Bulletin article."
https://www.youtube.com/watch?v=ziTE32hiWdk

FourthAndLong

Maybe Trump parallels Ivan the Terrible and Mika is representative of the hereditary aristocratic Boyars ?

Maybe. Maybe not.

FourthAndLong

Is that really Mika in that picture, or did the Colonel sneak one past us ?

MRW

Jack,

"There's billions of US dollars as cash all over the world. There's eurodollars and USD bank deposits in other countries. I have a multi-currency bank account in Singapore where I can park in USD."

How did your USD get into your Singapore bank account?

Did you fly over with a suitcase of cash? Or did you transfer from your account here?

MRW

OK, Jack and Fred,

I just found this on youtube: Frank Newman, former Deputy Secretary of the US Treasury, explaining what I am explaining here, but much more clearly.

It’s called Frank Newman: Government Finance. 22 min
https://www.youtube.com/watch?v=aA8I60oR_hA

watch it

Fred

MRW,

From selective history to an economics lecture and now english newspeak. Regarding Henry, the good capitalist, explain why Walter Reuther had to do what he did two decades later?
https://en.wikipedia.org/wiki/Walter_Reuther
"...the federal government needs to step in to increase spending to jumpstart the economy, not introduce austerity." How oh how did the economy ever recover from the Panic of 1819, of 1837, 1857, 1893, 1901 1903, 1921.... Boy if only John Maynard Keynes had been born sooner..... but then the policy of the US Federal government is a political decision not one subject to the settled science of economists or of Canadian commenters.

"Businesses have been sitting on over $2 trillion in cash since 2009 ...."
Newsflash: Each of the individual corporate entities that in aggregate have this $2 trillion in cash money, "sitting" as you put it, (and apparently earning an annual return of zero) are not controlled by economists or the US federal government.

MRW

Well, Jack, watch this. This guy explains why this is wrong thinking, "You will notice that it is a note of the Federal Reserve NOT a US Treasury security. They are two different entities.”

Paul McCulley: Sovereign Money. McCulley was Former Chief Economist and Managing Director of PIMCO
https://www.youtube.com/watch?v=Sdhv2WuoYGM

GREAT LECTURE. Wish I’d seen this before today. Could have saved myself hours responding here.

The Porkchop Express

Salena Zito was one of the few reporters during the campaign to dispassionately report without seemingly little to no bias one way or the other about what was happening around the country with respect to the Trumpster. Her editorial in the NY Post was pretty spot on about the chasm between the press and the population, and how simple things like the reemergence of local press would help ameliorate tensions.

http://nypost.com/2017/02/23/why-all-your-news-now-comes-with-a-heap-of-condescension/

MRW

Fred, watch the former Deputy Secretary of the US Treasury explain it here:
https://www.youtube.com/watch?v=aA8I60oR_hA

Fred

MRW,

How wonderful, the CEO of a Chinese Bank to explain economics. Why watch him when I can see your macro economic ideas do such good in Venezuela on the nightly news. Meanwhile why the need for unions of which Walter Reuther was one of the most successful advocates? How about recovery from all those other panics, recessions and depressions listed above?

Fred

MRW,

CEO of Schenzen Bank and former Clinton banker talking about the full employment economy. "Some of the politics is almost religious." I think that describes you pretty well.

MRW

Fred,

Newman only went to China in 2008, eight years ago, the first American banker ever tasked with saving a Chinese bank.

You attempt to diminish Newman's accomplishments. He was Chairman and CEO of Bankers Trust, Vice Chairman of the Board and Chief Financial Officer of BankAmerica Corporation, among other equally stellar private sector jobs. And if you knew what Banker’s Trust represented at the time he headed it, you wouldn’t be so haughtily dismissive.

Venezuela’s current problems come from a failure to handle their fiscal responsibilities and infrastructure when they had oil cash galore. For one thing, they didn’t grow food. They imported it. Now they can’t afford it, and the people are starving.

"all those other panics, recessions and depressions listed above" existed under a different financial regime (gold standard). Comparing now to then is like comparing our interstate highway system to a time when we all drove horses.

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