Question: Where does the physical money come from?

[primaticves]

Hey guys,

I was watching this video from Mike Maloney on YouTube (https://www.youtube.com/watch?v=iFDe5kUUyT0). There was a part where he says that the Fed writes a blank cheque to buy the bonds. I understand that currency is created when the bank receives the cheque but where does the bank get the physical money from?

Thanks,

 

[Jislizard]

Only about 8% is physical money, the majority only exists digitally.

http://money.howstuffworks.com/currency6.htm

 

[primaticves]

Thanks. So the Fed would just deposit money into the banks accounts electronically. Got it

 

[Ipv6Ready]

Thanks. So the Fed would just deposit money into the banks accounts electronically. Got it

Exactly like Cesar would send a letter of credit to Gaul or Alexandria, before the letter had to be delivered now it is send electronically.

 

[Killface]

Thanks. So the Fed would just deposit money into the banks accounts electronically. Got it

Exactly like Cesar would send a letter of credit to Gaul or Alexandria, before the letter had to be delivered now it is send electronically.

...and the US will probably suffer the same fate as the Romans eventually...

 

[Ipv6Ready]

Thanks. So the Fed would just deposit money into the banks accounts electronically. Got it

Exactly like Cesar would send a letter of credit to Gaul or Alexandria, before the letter had to be delivered now it is send electronically.

...and the US will probably suffer the same fate as the Romans eventually...

100% though I think it is too early to predict when the change will come for Renminbi to take over.

I mean no one really puts a specific date on when the British Pound was superseded as the reserve currency by USD but one thing is for sure we are in the middle of transition.

 

[Annie]

I don't know that this specifically answers your questions, but I love this 7 minute video explaining the Federal Reserve.

 

[TheEnd]

The Fed loans the U.S goverment all those Trillions of $$$.......... PLUS interest.

Who pays the principal + interest?

The taxpayers!!!

 

[tolly_67]

I don't know where the physical money comes from and I sure have no f****** idea where it goes either. Each fortnight it comes in and ..."poof'...like magic, it's all gone. It's a bloody conspiracy.

 

[Roswell Crash Survivor]

I don't know where the physical money comes from and I sure have no f****** idea where it goes either. Each fortnight it comes in and ..."poof'...like magic, it's all gone. It's a bloody conspiracy.

Unsolicited advice:

• Bite the bullet on saying 'No' to people around you asking you to pay for things; conflict is inevitable, accept it
• Issue yourself a bill for 7.5-10.0% of your net income, always pay that bill first

Generalization
Regular Savings = Regular Income - Regular Expenditures

Almost everyone has 'leaks' in the personal/household budget they didn't know about, until they made an effort to investigate it.

 

[systematic]

 

[systematic]