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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (36293)	7/19/2005 10:27:44 AM
From: philv	Read Replies (3) \| Respond to of 110194

A loan produced by the fractional banking system, when paid back should not affect the money supply, because it is taken back out of circulation when it is paid back. However, because debt of all kinds has been steadily and parabolically rising through good times and bad for many years, with no hope of reduction or pay back, that is simply money printing. Debts that can't or won't be paid back is money printing. Furthermore, a debt that isn't paid should lead to bankruptcy. That's my simple explanation. I am looking forward to some of the pros on this board to provide a better one. As an aside, Greenspan argues that because assets have luckily inflated, the debt to equity and debt to GDP is not a concern. He goes on to opine that there is no asset (housing) bubble, and therefore, the asset's value is permanent and supports the level of debt. So, there is no problem, no bubble, no trouble! <g>

To: loantech who wrote (36293)	7/19/2005 11:29:04 AM
From: Umunhum	Read Replies (2) \| Respond to of 110194

I am way out of my depth here but doesn't the US have unlimited ability to print money or produce it digitally? Yes and No. Theoretically the US can print an unlimited quantity of money and thus pay off our entire national debt. However if we ever did that, the dollar would cease to exist as money because no one would take it in exchange for goods. When does this tipping point occur? That is the million dollar question. I believe that foreign interest in the dollar is going to begin to wane and higher interest rates are going to be required to keep the money flowing into our treasuries. Higher commodity prices are going to have a starring role in the decline of the dollar.

To: loantech who wrote (36293)	7/19/2005 11:46:41 AM
From: critical_mass	Read Replies (1) \| Respond to of 110194

I recommend a book called "The Creature From Jekyll Island" by G. Edward Griffin. In the book, Griffin describes what he refers to as the "Mandrake Mechanism" in which money is created out of thin air. It was recommended on one of these boards by "Orkrious". I don't want to misquote him, but he mentioned that after reading the book, he was compelled to buy some gold - and that makes sense. <g/ng> There is a small "tin foil hat" feel to the book, but overall, it is very interesting.