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Printing Money: The Absolute Privilege of U.S. Dollars

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Re: Printing Money: The Absolute Privilege of U.S. Dollars

#11

Post by mark_l_watson »

sschueller wrote: post #2

"It is unavoidable that one day in the far far future, the U.S. loses reserved currency status. " There are some opposing opinions on this being far far away. Recently the USD has lost a significant amount in global percentage mainly due to all the sanction the US imposes. The US treasury itself warned that these sanctions are bad for thr US. [1] [1] https://www.livemint.com/news/world/yellen-says-sanctions-ma...

I hope it is far in the future but you are probably correct that losing reserve currency status may occur much faster than the pundits say it will. I worry that weaponizing the dollar with excessive sanctions will hurry this process, with not much real value to US citizens.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#12

Post by toomuchtodo »

lockhouse wrote: post #8
csense wrote: post #6

Earlier quoted context omitted.

Investing in China seems terribly risky to me. China's been telegraphing it will attack Taiwan pretty soon. When that happens, good luck not having your investments either destroyed or nationalized.

I think war or no war those possibilities are a major risk with China given their form of government.

Not to mention their rapidly aging population. People forget: growth and economic power comes from demographics. China got old too fast. India and Africa are the remaining global youth, and I’m unsure there is appetite to invest in either market.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#13

Post by quickthrowman »

willmadden wrote: post #7

I’ve been thinking about an “equity only” currency where charging interest and debt are outlawed. If you need to raise money for a project, to buy a property, or to finance a business, you must sell a portion of your venture/asset to raise the necessary capital. The idea is to outlaw debt and money creating more money via interest. I don’t see why this system can’t be as efficient as a debt and interest based financi…

> Lending money to a business is essentially the same as investing in it anyway.

They’re very clearly not the same, debt and equity are separate things that serve different purposes. And yes, I am aware of convertible bonds and other forms of combined debt/equity instruments.

Debt is senior to equity in bankruptcy filings. A troubled company will pay its lenders and bondholders before paying dividends to its equity investors.

There has always been debt, society can’t function without it. “Lend me seeds now so that I may grow a crop and pay you back at harvest time” is a form of debt that has been around as long or nearly as long as agriculture has.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#14

Post by NemoNobody »

mark_l_watson wrote: post #11
sschueller wrote: post #2

"It is unavoidable that one day in the far far future, the U.S. loses reserved currency status. " There are some opposing opinions on this being far far away. Recently the USD has lost a significant amount in global percentage mainly due to all the sanction the US imposes. The US treasury itself warned that these sanctions are bad for thr US. [1] [1] https://www.livemint.com/news/world/yellen-says-sanctions-ma...

I hope it is far in the future but you are probably correct that losing reserve currency status may occur much faster than the pundits say it will. I worry that weaponizing the dollar with excessive sanctions will hurry this process, with not much real value to US citizens.

What currency is stable enough to replace the Dollar? Very likely we repeat the Cold War - Western countries will definitely continue to use the Dollar.

I wouldn't want to use the Yuan considering the frequent government manipulation of the currency.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#15

Post by naveen99 »

willmadden wrote: post #7

I’ve been thinking about an “equity only” currency where charging interest and debt are outlawed. If you need to raise money for a project, to buy a property, or to finance a business, you must sell a portion of your venture/asset to raise the necessary capital. The idea is to outlaw debt and money creating more money via interest. I don’t see why this system can’t be as efficient as a debt and interest based financi…

So no credit cards for businesses or their employees ? What about unpaid invoices to other businesses , do they get converted to debt or equity ?

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#16

Post by fnordpiglet »

NemoNobody wrote: post #10
joshdata wrote: post #5

This article seems to be extremely confused about the difference between increasing the supply of dollars (printing money or other tactics of the Federal Reserve) and deficit spending (moving already-created dollars from the public, including foreign holders, to the government and then right out to the U.S. public again).

I'm confused as to how that's different. Essentially the US can deficit spend an extraordinary amount, even if that deficit is financed, bc the US can simply print money to pay back the debt - without most of the drawbacks that normally come when you money is created out of nothing, BC the US dollar is the Global reserve currency.

Because it doesn’t print new money to pay it back. It could. But it doesn’t.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#17

Post by nocoiner »

quickthrowman wrote: post #13
willmadden wrote: post #7

I’ve been thinking about an “equity only” currency where charging interest and debt are outlawed. If you need to raise money for a project, to buy a property, or to finance a business, you must sell a portion of your venture/asset to raise the necessary capital. The idea is to outlaw debt and money creating more money via interest. I don’t see why this system can’t be as efficient as a debt and interest based financi…

> Lending money to a business is essentially the same as investing in it anyway. They’re very clearly not the same, debt and equity are separate things that serve different purposes. And yes, I am aware of convertible bonds and other forms of combined debt/equity instruments. Debt is senior to equity in bankruptcy filings. A troubled company will pay its lenders and bondholders before paying dividends to its equity i…

Give him a break, he’s in the middle of re-discovering Modigliani-Miller, except with a dash of crypto-optimism and pro-indentured servitude (??) thrown in.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#18

Post by willmadden »

PopAlongKid wrote: post #9
willmadden wrote: post #7

I’ve been thinking about an “equity only” currency where charging interest and debt are outlawed. If you need to raise money for a project, to buy a property, or to finance a business, you must sell a portion of your venture/asset to raise the necessary capital. The idea is to outlaw debt and money creating more money via interest. I don’t see why this system can’t be as efficient as a debt and interest based financi…

>Lending money to a business is essentially the same as investing in it anyway. If the business defaults the result is the same. It is far more common for a business when times are hard to stop (or never start) paying out to its equity investors (dividends) while still servicing its debt. It is not "essentially the same as investing".

That’s only because of the way loan agreements are structured and because law and regulation are written around a debt based system.

If businesses couldn’t take on debt there would only be one class of stakeholders, the shareholders.

It would be an interesting thing to pilot in Muslim countries where charging interest is effectively forbidden. I think it could be a more efficient, transparent, and equitable financial system.

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#19

Post by nocoiner »

willmadden wrote: post #7

I’ve been thinking about an “equity only” currency where charging interest and debt are outlawed. If you need to raise money for a project, to buy a property, or to finance a business, you must sell a portion of your venture/asset to raise the necessary capital. The idea is to outlaw debt and money creating more money via interest. I don’t see why this system can’t be as efficient as a debt and interest based financi…

I guess I have a few questions.

1. Why are returns on equity inherently favored versus returns on debt?

2. How is new money created as productive capacity increases?

3. How are you going to have an efficient stock system when every transaction requires immediate settlement?

4. Why do the securities regulators need to go away in a hypercharged securitized society?

5. How are people borrowing hard currency in their road to serfdom? I thought there was no debt?

6. When you say debt is the same thing as equity, are you saying that in a stylized Modigliani-Miller sense or do you literally think debt and equity get similar treatment in the capital stack?

7. Do you realize that everyone debt is someone else’s asset?

Re: Printing Money: The Absolute Privilege of U.S. Dollars

#20

Post by JakkTrent »

fnordpiglet wrote: post #16
NemoNobody wrote: post #10

Earlier quoted context omitted.

I'm confused as to how that's different. Essentially the US can deficit spend an extraordinary amount, even if that deficit is financed, bc the US can simply print money to pay back the debt - without most of the drawbacks that normally come when you money is created out of nothing, BC the US dollar is the Global reserve currency.

Because it doesn’t print new money to pay it back. It could. But it doesn’t.

Is there an example of this happening? I'm supposed to believe that we ask for money back from foreign countries that have stockpiled dollars as their reserve to finance domestic spending - instead of just printing money.

Why would we do that?

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