Hey Guys, Want some help with understanding this. So the Federal Reserve can print currency whenever it wants. The Central Banks of the world holds currency in US dollars and currencies of its own country. My question is if the Federal Reserve keeps printing money its devaluing its currency so doesn't that mean that against other currencies it will be weaker? Wouldn't that make goods from the US cheaper for other countries to buy stuff from? Thanks
Yes. Goods primarily made in the USA will be cheaper for non-US people (noting that many goods have complex supply chains with components made in multiple countries nowadays). Imports for people using US-denominated currency will be more expensive.
Worth noting that although a depreciated US dollar will theoretically be good for exports it won't be good for the average US citizen as it will kill their purchasing power. See THIS THREAD
Thanks guys. So if there is so much USD floating around how come compared to the aussie dollar why is the aussie dollar always weaker?
because every country is abandoned their own fiat, and changing it to the usd. (think super fund, hedge fund, big money Accounts), and usually push stock market up (thats usually where it ends up, it could end up in bonds, metal too). our aud is weaker because there is not so much demand for it, also it makes our commodity export cheap, therefore makes our local economy need to employ people again to fulfill the demand. that is the theory anyway, and we always on the race to the bottomless pitt, which causes price increases everywhere. as a current holder of aud, i dont want some dude decide my purchasing power. so what can we do about this ? take advantage of this ?
Why only worry about one side of the equation... the Feds can "unprint" money out of circulation too. In fact Feds are starting on the journey of Contractionary Monetary Policy
Yes, the whole of the media including and especially the pm dealers part of it talk about money creation. That the governments destroy money too (usually after holders lost it along speculation on frontrunned markets), is never talked about. Though about the Fed, I came to the conclusion of the opposite. Between 2000 and 2008, the Fed (and its other governments buddies) was on the expanding monetary policy. That caused the boom that (on purpose) busted in 2008. In 2008, they switched to contractionary monetary policy, resulting in that so-called "greater recession'. The QE's were a scam - only the IOER rate, a small (0.25%) fraction of the QE amounts, was added, not the whole / the total of QE. And now, gradually, the Fed is again expanding - again disguised (the IOER rate increases, but the total balance total drops at a faster rate, just like in the beginning but the opposite). So I came to the conclusion that the 2008 crisis, and the QE's, were all together a scam to falsely suggesting price inflation, luring people to markets (including stocks and gold and silver), that they frontrunned first, thus inflicting higher prices, less shares, less oz gold/silver for the fiat, to then dump their frontrun position again, bringing back prices to what they were, in meantime having swapped that peoples extra paid money to their reserves, to destroy it again. Resulting in the newly created money, replacing existing. And the fun thing is, in some cases they performed a nice trick, like in precious metals case, they FINED their own buddies banks (london bullion market association members) for market rigging, to return that extra money that people paid, and lost, to their own account, as to be able to destroy it without raising eyebrows everywhere. Also, look at how they used their own orchestrated crisis, to force through / make accept, a whole crap of new regulation, hampering speculators in their ability to frontrun / outsmart the central planners buddies instead.
Yes and no. The currencies values are measured against eachother. Meaning one cannot become "stronger" without (the) other(s) becoming "weaker". They put limits on the exchange value variations (which are due to speculators they act against). An upper and a lower bound on the charts. When the trend goes under the lower boundary, the central bank of the "gaining currency" buys (eventually using buddies as middlemen) fiat from the "losing currency". When it goes above the lower boundary, the central bank of the "losing currency" sells fiat from the "winning currency". An example article that explains this: https://en.wikipedia.org/wiki/Snake_in_the_tunnel Why that name: the currency trends, due to the upper and lower boundaries, look like snakes slipping through a tunnel. This is nothing new, this is what the monetary policy is for.
I agitate for a polical change to a zero. All politicians back to private sector jobs - again helping in the economy, having to please others to get pleased by others. End of State. No company anymore with legal privileges, including the one to force people to pay whatever for whatever including nothing and getting paid for inflicting damage!
Fed is own by few member banks Fed does not print large bill, they just lend to their member owners, and have the treasury pay the interests what is being devalued, are the rest of money out there, except what they loan to the member banks and paid interest on. This money are QE and earn higher interest to bail the banks out, other places get their interest of 0.25% where else this money get their members preferential rates. The world has a deflation, the money velocity has been at its lowest... This QE money just sit in their book earning good interests and does not go to the economy hence we don't see inflation that is beyond control The loans are usually taken by borrowers countries and there is never enough USD required to pay them back, we have a strong dollar policy ...
