Mohan, Sankar:
I am also missing something, perhaps more basic. I keep asking this question, and if it's really stupid, tell me to go to the library and study some more basic economics. I'll understand. But I've always considered myself a three-digit IQ person, and I can't grasp the money flow big picture. I like to simplify, so here's what I come up with:
The US spends more than it makes. We borrow the difference from other people, many of them Japanese and other Asian countries by selling them our bonds. They in turn save their money, but their corrupt governmental supported banking systems have cooked the books for many years of fine dining, and now the waiter has brought the check, and they can't pay it. So the IMF (including US contributions) will give the broke Asian countries money (there's that word again) to avoid their default, so they can keep buying our bonds, or lending us back the money we just lent them. Wait a minute, I'm getting dizzy.
Seriously, am I thinking too simplistically about "money" when it is really electrons on computers jumping around and it only exists in a conceptual sense?
Next question, if this "money" is just being printed, when will the world wake up and realize that this is not a medium which is trustworthy for their long or even short term storage? Will that ever happen?
Thanks.
Jack |
