The Truth about Money Printing. Do you want to understand?

Discussion in 'Markets & Economies' started by President Trump, Jul 4, 2020.

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After reading the above what do you believe:

  1. Interest rates will go up.

    7 vote(s)
    22.6%
  2. The Fed can just keep buying treasuries to infinity

    17 vote(s)
    54.8%
  3. Modern Monetary Theory will fix the problem

    2 vote(s)
    6.5%
  4. The US will default.

    10 vote(s)
    32.3%
Multiple votes are allowed.
  1. Lovey80

    Lovey80 Well-Known Member

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    Italy recently defaulted.
    Argentina not long before that.
     
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  2. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    I didn't know Italy defaulted. It's not a sovereign nation anyway so it doesn't count.

    Argentina? Tinpot shit socialist state that chose to default?

    Neither are fair comparisons with the US, UK, Aus, NZ, Japan, China etc.
     
  3. President Trump

    President Trump Active Member Silver Stacker

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    I think I finally understand your point you are saying that as the economic position of a sovereign deteriorates it could choose not to default and instead accept some other awful consequence. Kind of like you holding a gun to my head and a knife to my throat and saying "choose". I can only be shot in the head if I choose to be.

    So once no-one will trade with you in your own currency (because you have printed it to oblivion) and the IMF refuses to lend to you without conditions, you could accept all sorts of austerity and other painful measures. So defaulting is a choice.
     
  4. precious roar

    precious roar Active Member

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    I don't think that is his point, rather that in this current climate where most nations are struggling to some degree, printing money won't lead to hyperinflation because they are doing it to some extent so inflation and currency devaluation may occur but it won't get to hyperinflation.

    Of course, I could be totally wrong, and shiney does actually mean what you wrote.
     
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  5. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    It's not important what currency is used to trade, it's the wealth that is enhanced through trade that matters. And because the US consumer knows no bounds when it comes to consumption and their desire to be wealthy, there will always be trading partners for the US.

    The IMF is of no value to nations such as the US, UK, Aus etc. They're only of value to tinpot nations.

    And austerity is so outdated. There's no need for it.
     
  6. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    I think CBs will have enough control to prevent hyperinflation, its just that they'll be late to the party so inflation will get a good roll on before they can cool the economy.
     
  7. President Trump

    President Trump Active Member Silver Stacker

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    As I can't even get agreement that the USA can default there is no point discussing money printing or the actions of the fed or the government. If you believe they can't Default then everyone can do whatever they like without consequence.
     
  8. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

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    I'm wondering how America will stop hyperinflation. Its gonna happen unless they can cause equal deflation which could be just as painful.
     
    Last edited: Jul 14, 2020
  9. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Well as far as I know according to MMT The Fed will adjust the official cash rate and governments will raise taxes and reduce spending so that there is less currency in circulation.
     
  10. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

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    Sounds like one of trumps fairy tales to me.
     
  11. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Like the US will default fairytale? :D
     
  12. President Trump

    President Trump Active Member Silver Stacker

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    Actually a fairy tail is defined as pretend story that has never happened in real life. No country has ever reversed hyperinflation with taxes and reduced spending. Fairytail fairytail fairytail.
    On the other hand many countries have defaulted from money printing. Reality reality reality.
    You probably have some good points its a shame you keep coming back to the one thing you seem to know nothing about. Sovereign default.
     
  13. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Actually no, there are huge consequences. And while there are still people on this planet that don't understand what it means for a sovereign nation to have a monopoly on the issuance of fiat currency, then there is worth in discussing money printing and the actions of The Fed and the government.

    A nation can only default if it chooses to because it can never run out of money.
     
  14. precious roar

    precious roar Active Member

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    ^^ If I may put on my translators hat again: I think President Trump's point is that when you continually print money, it becomes useless and therefore it isn't able to pay off debt.
     
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  15. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    How would it become useless? We're forced to use it by law, our goods are priced in it and our tax obligations are only payable with the State's monopoly fiat currency.
     
  16. President Trump

    President Trump Active Member Silver Stacker

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    Unfortunately if it prints to to oblivion it runs out of money anyone will accept. In Argentina they blew up their own currency by printing. As you say they couldn't default but no-one would accept their currency. They had to start using US Dollars for international trade. Then they defaulted on the US Dollar obligations.
    This is where you and LEO call "tinpot nation" or "that could never to the USA" or "people are too stupid to stop taking dollars". I don't think so. This can happen in the USA. I think they know it can happen and that is why they wont print to oblivion. But they are going to F it up quite a lot.
     
  17. President Trump

    President Trump Active Member Silver Stacker

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    All those things were true in Argentina as well.
     
  18. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    The US is not Argentina.

    The USD is not the Peso.
     
  19. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    The comparison is not applicable.
     
  20. leo25

    leo25 Well-Known Member Silver Stacker

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    Yes there is a painful process in reducing high inflation, but it can be reversed if a central banks or government desires it. Just like a person addicted to drugs can reduce their addiction, but there is a painful process awaiting them. It's a choice that can be made, providing you don't wait too long where it's become extreme. The USD hasn't got to an extreme point yet and is still withing control of the central bank.
     

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