When money is inflated, where does it go? - page 2.

fabiorem

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Quote from: exstasie on June 08, 2019, 02:22:12 AM

Quote from: fabiorem on June 07, 2019, 10:18:39 AM

Today gold is being controlled by derivatives, but not bitcoin, so bitcoin is a threat to the fiat system, as it would not roll the debt.

Your point brings up an interesting question. What happens when Bakkt, Fidelity, CME, and other institutions launch physically settled derivatives for Bitcoin? Can the spot markets be controlled by derivatives like gold? Everyone is hailing Bakkt as a boon for the market but is it really?

Well, just look at history, when CME launched futures in 2017, some hours later the bear market of 2017-2019 started. Before they launched it, I was already wary this could end in shit, and it confirmed.

Derivatives are suppressing gold and silver prices for many years. So yes, they can do the same to bitcoin. And they dont need to have the bitcoin, just authorization from State bureaucrats.

Let people hail Bakkt as they want, I just want profit. Ideology is useless in a clown world.

el kaka22

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Normally, inflation is not equal to printing of money, of course printing money does cause an inflation but you do not need to print money to create inflation, you can have inflation without printing money too.

In the case there is no printed money the inflation is caused by the increasing values of the products, banks charge an interest for the loans, the landlords charge more for rents, the products gets more expensive, the workers require more salary and it continues like that in a cycle where everything gets more and more expensive in the world since one thing that gets more expensive affects all others. However, during money printing stage it is because there is more money in the flow and that results with money losing value which then makes things more expensive in return.

5ensei

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It is assumed that as prices go up more money is needed to cove those prices, but when the bank prints too much then it becomes worthless just like in Venezuela and Zimbabwe. This is where bitcoin comes in, can't just print more when the bank tells them to

exstasie

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Quote from: jackg on June 07, 2019, 07:05:36 PM

No, I'm asking where the money goes immediately after it's printed? Who is it credited to as its made?

When the Fed lowers rates, banks pay less interest, creating additional money to lend. Banks carry these cheaper rates over to businesses and investors, who borrow more money. This is inflationary since it pumps money into the economy.

The Fed also buys treasuries from banks (QE), swapping them for credit, which is then pumped into the economy through lending the same way.

So you could say the "printed money" is credited to banks, who inject that liquidity into the economy.

Reid

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Quote from: jackg on June 07, 2019, 07:05:36 PM

No, I'm asking where the money goes immediately after it's printed? Who is it credited to as its made?

I hope I get the answer right because I am no economist too.

I think it goes directly to Central Bank of whatever country it is. All of them are government owned which means it is also credited to the government which first will be used into creating projects or for other necessary payments that needs to be done by the government.

Central Banks are the ones who hold the money printing plates and that is already one reason they are the only ones who could issue them.
I really hope I am right here. Grin

exstasie

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Quote from: fabiorem on June 07, 2019, 10:18:39 AM

Today gold is being controlled by derivatives, but not bitcoin, so bitcoin is a threat to the fiat system, as it would not roll the debt.

Your point brings up an interesting question. What happens when Bakkt, Fidelity, CME, and other institutions launch physically settled derivatives for Bitcoin? Can the spot markets be controlled by derivatives like gold? Everyone is hailing Bakkt as a boon for the market but is it really?

jackg

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https://bit.ly/387FXHi lightning theory

No, I'm asking where the money goes immediately after it's printed? Who is it credited to as its made?

magneto

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Quote from: jackg on June 07, 2019, 10:09:50 AM

I'm missing a link here and things don't seem to add up.

Most places say that a bank gets the money for inflation and has to pay it back, but if this is the case the system would topple much faster than it does when it's just with its fractional reserve ponzi shit.

Is the government given this money? I'm talking about the UK but if there's the same or different elsewhere then feel free to discuss thst too.

I don't really understand your question here - are you asking where the money goes after inflation occurs?

If yes, then I think the answer is just values of goods/services/assets. When the purchasing power of your dollar goes down, it means that more people have more dollars to throw around in the marketplace, pushing prices up for goods since the supply of these stay relatively the same.

However, if you're asking about who benefits from money creation that exists as a result of fractional banking practices, I think the answer is still banks. Given the fact that with a lower reserve requirement, they are essentially able to lend out multiples of their deposits, which wouldn't be otherwise possible.

jackg

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https://bit.ly/387FXHi lightning theory

@tp, I might just keep moving this topic as it can fit in economics, speciation and p&s.

I don't think government bonds are the whole story. The UK offer a fixed rate from nsandi and that pays interest at 1.7% a year. Our current inflation rate according to the bank of England is 1.9%.

The Sceptical Chymist

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Wait a minute, I've read that when we talk about "money printing" it means that the US government (usually the prime culprit) is issuing bonds, i.e., treasury notes and so forth. The Fed isn't literally printing more bank notes, though I do believe that's a small part of it.

Obviously I'm not an economist, but I have read some stuff about quantitative easing and all that happy horse shit. But in any case, the actual cash--the dollar bills--that get printed go to banks first and thence to their customers. But as I said, the real inflationary money printing is in the form of securities from the government.

Would be nice if there was an actual economist who could answer this question. There's got to be some on this forum.

playboy654

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Quote from: jackg on June 07, 2019, 10:09:50 AM

Is the government given this money? I'm talking about the UK but if there's the same or different elsewhere then feel free to discuss thst too.

Money is going to the government in the form of taxes. Cheesy

They are printing money to give loan for us,then we are paying half to banks and remaining to government so they are printing more money and the cycle repeats.

fabiorem

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Quote from: jackg on June 07, 2019, 10:22:11 AM

I meant to say what happens to the money when it's printed? It goes to the government?

They release from the central banks to the other banks, to put them into circulation.

jackg

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https://bit.ly/387FXHi lightning theory

I meant to say what happens to the money when it's printed? It goes to the government?

fabiorem

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Inflation is created when the government print bank notes. This newly-printed money increases the price of products, due to having more money around. Fiat money is not backed by gold, and since governments have debts to international banks, each note is a garantee for that debt. For this reason, there is a constant need for growth in the economy, so that the multiplication of products can pay the interests of these debts, leading to more bank notes being printed, which in turn inflate the price of products and creates more debt, in a snowball effect.

Bitcoin and precious metals have PoW (proof of work) and for this reason, they are not inflactionary. In fact, they are deflactionary, as there was no growth in the economy when gold was the money standard. Today gold is being controlled by derivatives, but not bitcoin, so bitcoin is a threat to the fiat system, as it would not roll the debt. The whole idea of the fiat system is to impoverish the nations through the stacking of debt, which happens through inflation.

jackg

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https://bit.ly/387FXHi lightning theory

I'm missing a link here and things don't seem to add up.

Most places say that a bank gets the money for inflation and has to pay it back, but if this is the case the system would topple much faster than it does when it's just with its fractional reserve ponzi shit.

Is the government given this money? I'm talking about the UK but if there's the same or different elsewhere then feel free to discuss thst too.

Topic: When money is inflated, where does it go? - page 2. (Read 402 times)