Fed handed out $1.2 Trillion in secret loans

[QFIT]

Don't know why the TP keeps talking about "printing money." Perhaps this is just another invented phrase of those that wish to find fault and can't seem to come up with an adequate argument. Where is all the predicted hyper-inflation?

The TP seems to be very upset that the economy is growing, industry is hiring and inflation is low. So, they keep claiming it's worse than ever, Obama has destroyed it, and only they can save us. Meanwhile, they do what they can to scare business and consumers out of spending.

[aslan]

Originally Posted by QFIT

Don't know why the TP keeps talking about "printing money." Perhaps this is just another invented phrase of those that wish to find fault and can't seem to come up with an adequate argument. Where is all the predicted hyper-inflation?

The TP seems to be very upset that the economy is growing, industry is hiring and inflation is low. So, they keep claiming it's worse than ever, Obama has destroyed it, and only they can save us. Meanwhile, they do what they can to scare business and consumers out of spending.

Let me answer my own question. Money comes into existence when the Fed decides to loan someone money. The money does not have to exist to be loaned out in this manner. Formerly, "X" amount of gold would have to be set aside for each dollar printed, plus prime commercial paper, both serving as backing for the new one dollar bill put into service. Since elimination of the gold standard, the only requirement for printing new currency is the backing of prime commercial paper, or equivalent. The Fed then is using the promises-to-repay of these borrowing countries and banks as the backing for the new currency, what people commonly refer to "printing money out of thin air," which is not exactly true. Still, many think it a stretch to believe that we'll ever see this loaned out money again. But $16 trillion! I had no idea!

[QFIT]

But most of it has already been paid back.

I'm beginning to think that conservatives don't trust the capitalist system.

[aslan]

Originally Posted by QFIT

Don't know why the TP keeps talking about "printing money." Perhaps this is just another invented phrase of those that wish to find fault and can't seem to come up with an adequate argument. Where is all the predicted hyper-inflation?

The TP seems to be very upset that the economy is growing, industry is hiring and inflation is low. So, they keep claiming it's worse than ever, Obama has destroyed it, and only they can save us. Meanwhile, they do what they can to scare business and consumers out of spending.

I have heard the reason there is no inflation is because the banks and others are sitting on all the money we have loaned out. When they begin to release it, the inflation will begin. This makes sense and explains why so much influx of money has not resulted in a robust economy by now. I believe Keynesian theory assumes the money spent (in this case, loaned out) will be used to conduct business, not hoarded.

[aslan]

Originally Posted by QFIT

But most of it has already been paid back.

I'm beginning to think that conservatives don't trust the capitalist system.

It's not capitalism. Many of them, notably the TP, don't trust the FED.

[aslan]

Originally Posted by QFIT

But most of it has already been paid back.

I'm beginning to think that conservatives don't trust the capitalist system.

I assume you are talking about TARP, not the money since made by these companies, and not other money loaned (printed) by the FED, including the $17 trillion alluded to in an earlier post.

[QFIT]

Originally Posted by aslan

I assume you are talking about TARP, not the money since made by these companies, and not other money loaned (printed) by the FED, including the $17 trillion alluded to in an earlier post.

I am talking about all money loaned and temporarily invested.

[aslan]

Originally Posted by QFIT

I am talking about all money loaned and temporarily invested.

The majority of that has not been paid back.

[QFIT]

Originally Posted by aslan

I have heard the reason there is no inflation is because the banks and others are sitting on all the money we have loaned out. When they begin to release it, the inflation will begin. This makes sense and explains why so much influx of money has not resulted in a robust economy by now. I believe Keynesian theory assumes the money spent (in this case, loaned out) will be used to conduct business, not hoarded.

If the banks are hoarding money, then this is a good reason for direct gov't action as opposed to using the private sector - at least the banking industry. As I understand it, Obama will now try to get infrastructure projects started via the construction industry. Of course, the TP will try, and likely to suceed, in stopping him. No "victories" will be allowed Obama. If they must keep the economy dead, they will do so.

[QFIT]

Originally Posted by aslan

The majority of that has not been paid back.

According to whom?