No one prints money you doofus. New money is borrowed money and just in case you failed at Econ 101, banks have always been lending money even in the gold standard days. That is the only way they make money and every time they do it, they create new money. I swear, for a guy who spends way too much time on idiotic posts about money, you have no clue what money is or where it comes from...typical Mizes Institute guy.
Not very typical in that I have yet to read anything from that Institute, so I couldn't really say whether I was insulted or complimented. I never took econ101 either, but I did hold a Loan Originator license in the state of Illinois for the greater part of a decade, I think I know a little bit about borrowed money. I created new money every time I closed a loan. And in case you never knew, the US Treasury has 12 mints, and they actually do print money.
what money is: anything of perceived value used to settle a commercial transaction (my words, off the tip of my tongue)
Legal debts are used as money. A legal debt is a contract between two parties of some amount owed.
A bank coupon qualifies as a legal debt, the bank agrees to pay face value upon redemption. So the coupon is a debt to the bank. (this includes Federal Reserve Notes in your pocket)
A bond qualifies as a legal debt. The Treasury agrees to redeem the bond at its matured value upon presentation to the Treasury.
A mortgage Note is a bond. The mortgage is the legal contract between the Lender and the tenant. The Note is the debt owed.
what money actually is: the controlled species of the state used to settle debts.
what money actually is in America: the Congressional mandated issue of the Treasury tendered for the settling of legal debts.
Treasury Bonds actually fall under the power of Congress to borrow money on credit. Our Constitution didn't lay out Treasury bonds as a money source for the nation. But since the nation shut down the silver dollar and the gold dollar, the only money the nation has left to use for trade is our bonds. The mints print pocket change for the Federal Reserve.
In today's system, banks draw capital into the market via the Federal Reserve. During the financial collapse of 2008, banks created $7 Trillion in new capital from the Federal Reserve. I called that "printing money". Actually, nothing gets printed, but you knew that, and you knew I know that... it is commonly called that. At any rate, what the doofus is saying is the stock market has risen purely on account of demand from new capital drawn by the banks - technically, that money is loaned - hence it is the point of creation. IOW, the meteoric rise in the stock indexes over the past 7 years is a stock bubble because it was merely a rise in stock prices due to demand from money creation and not growth from commercial activity. Or as I put it in the top post;
What you need to understand is this is printed money.
Over the past 7 years, our economy has risen 1-2% annually, and even that was from printed money, not increase in commercial activity. Now look at the what the DOW Jones did over the same 7 years; it rose almost 200%... All of that is from printed money, the actual value of the stock from commercial activity has gone no where. It is the biggest stock bubble ever. That's why I predict it will all tumble back to earth and start over at what it is actually worth; and that may have fallen to 5000 pts. Its what the market calls a "correction".
