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Tue Dec 4, 2012, 02:07 PM

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This message was self-deleted by its author (dtom67) on Wed Dec 19, 2012, 05:52 PM. When the original post in a discussion thread is self-deleted, the entire discussion thread is automatically locked so new replies cannot be posted.

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Reply This message was self-deleted by its author (Original post)
dtom67 Dec 2012 OP
PoliticAverse Dec 2012 #1
On the Road Dec 2012 #2
dtom67 Dec 2012 #6
HonEur12 Dec 2012 #4
dtom67 Dec 2012 #7
dtom67 Dec 2012 #5
HonEur12 Dec 2012 #3

Response to dtom67 (Original post)

Tue Dec 4, 2012, 02:17 PM

1. You may find this article interesting...

http://www.bloomberg.com/news/2012-12-03/treasury-scarcity-to-grow-as-fed-buys-90-of-new-bonds.html

Also: http://en.wikipedia.org/wiki/Quantitative_easing

The FED has been increasing the money supply by buying debt using money created by a computer keyboard, this doesn't increase the amount of 'national debt'.

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Response to PoliticAverse (Reply #1)

Tue Dec 4, 2012, 05:19 PM

2. What's Particularly Interest about the QE Progams

is that the Fed never simply prints money -- this is new territory. It's typically what financially reckless countries do, and theoretically could result in currency traders dumping the dollar, but that hasn't happened in this case. The Fed has avoided overdoing it, up to this point at least.

Typically though, the Fed increases the money supply by lowering interest rates, which results in banks lending more money. These new loans are in effect the new money introduced into the economy.

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Response to PoliticAverse (Reply #1)

Tue Dec 4, 2012, 05:28 PM

4. Correct.

 

Because the dollar is not tied to anything except what the Fed says, we can print as much as we want without borrowing a penny. (Theoretically...)

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Response to dtom67 (Original post)

Tue Dec 4, 2012, 05:26 PM

3. Inflation

 

But doesn't increasing the amount of money in circulation lower the value of the dollar?

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