Does anyone actually realize how money is introduced into the economy?

Discussion in 'Economy' started by Leweman, Apr 27, 2011.

  1. Leweman
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    Leweman Gold Member

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    What a scam!

    [ame=http://www.youtube.com/watch?v=xNehYxy77RI]YouTube - How Money is Created and Destroyed[/ame]
     
  2. Leweman
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    Leweman Gold Member

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    Pretty much great for the government and the banks and they get to control it. This shit needs to stop.
     
  3. Norman
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    Norman Gold Member

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    The money is not necessarily all debt backed though.... The FED can buy whatever it wants to back it. They still have some gold, and perhaps they even own some real estate.

    But the government can't ever pay the "printed money" back. That money is spent and the government has backed it with nothing. The wars and so on don't help in getting taxes to pay for it... Sure as of now it looks backed, but if they actually tried to sell all the treasuries.

    Apart from that I find the reserve ratios interesting. Does anyone have any knowledge where the ratios come from? Why 10%? Why 4% in europe? And I hear no percent at all in UK (hard to believe though), perhaps they have % timed deposits or something...

    And can banks really immediately create 9000 of new money on top of the 1000. I always thought they had to loan 900 first, which would then get deposited in the bank, and then they could loan that etc. And in the end the situation could be like that...
     

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