A Mental Walkthrough on how the United States monetary system actually works!

Keynes himself warned that if the Government became more than 25% of GDP, it would be damaging to the economy.

Read the books yourself.

 

I'm not a Keynesian

 

What creates demand for gold? What creates demand for fiat currency? What generates the supply of gold? What generates the supply of fiat currency?

 

You cannot support our current monetary system and not be a Keynesian. Let's be real here.

 

Our current monetary system has nothing to do with Keynes. I'm a modern monetary theorist. We deal with the simple operational realities of our revolutionized monetary system. I deal strictly in mathematical, logical, and realistic terms. I can care less about the Austrian's and their philosophical bullcrap.

 

Same thing other than the minimal material uses of gold.

One you dig it out of the ground the other you don't.

What's amazing is people think your countries productivity should be solely dependent on how much of that useless metal you find... lol.

 

BWHAHAHAHAHA! What's the point in discussion if you cannot acknowledge the inseparable nature of the two?

Ah. A New Keynesian.

Keynesians and Austrians are nearly literal opposites.

 

Nope, MMT is not New Keynesian... Chartalists are New Keynesians. We describe our current system which was not around during Keynes' day.

And you are an Austrian which was why I said it

 

OK, so if the Federal Reserve prints up money, and loans it out (at some rate of interest), and that is the only place where dollars come from, then my question is this: When it comes time to pay these loans back, where does the interest come from, since 100% of all existing money is already accounted for as the principle on the loan? It seems to me that there is here a mathematical neccessity to go further and further into debt every year, with no way (in the aggregate) to pay the interest, except to borrow more money, and thus owe even more nonexistant money in interest.

 

...and thus, they have permanently enslaved you.

Which is exactly the point that akphidelt refuses to even acknowledge.

 

he also refuses to acknoledge that the basic laws of economics dont stop at the shores of the US!

 

I agree and hope you are finally reading them

 

It is true that interest does not exist. But it is not true that the country has to go in to more debt to pay off the interest, since they can use existing money to pay off interest.

The Fed creates a "form" of dollars that were already created by the Government.

 

did you study economics in the busisness school in zimbabwe perhaps?

 

how can you say that? If the country is already in debt and needs to borrow and pay interest in order to repay the debt then its only natural that its just more debt!

 

Minimal material uses for gold is not the reason gold is as valuable as it is. Saying that the demand for gold is caused by "supply and demand" is redundant.

You're going to have to do better than that.

So you have to expend labor to get one out of the ground, and the other can be created with virtually no labor. Do you think the guy who is digging the gold out of the ground is going to do it for free?

Please explain this statement further. Your random generalizations are not enough to make for an effective debate.

 

So then what gives this magical metal it's value?

Who cares about the cost of labor to dig a medium of exchange out of the ground, lol

 

They can use the existing money supply to pay off interest on maturing debt. Doesn't mean they should.

 

Sure it does. Most of his fundamental theories are put into place...such as high government spending to stimulate economic production....that high spending is supposed to cause inflation, which gets people to spend their money, increasing economic production, low taxes, a strong central banking system to finance all of it.

The only thing that we do not follow economically is that Keynes said to pay down government debt during times of economic prosperity. However, Keynes was not stupid: he knows that governments with an infinite supply of money are never going to get out of debt. That is why he created the IMF/World Bank to establish an international socialist economic system, run on central banking, government debt and inflation. He dreamed of a one world government..and those dreams are slowly coming true.

Your positions are far from logical. You can't even wrap your mind around the basic fundamental concepts of the theory of money.

 

9 out of 10 times the countries doing this are already in a tight squeeze so the last thing they want to do is put more pain on its citizens so this is why either more debt or inflation is the natural alternative they will take!

 

I simply describe how America works. So if you are arguing against me then you are arguing against America's system. Good luck with that!! I'm sure the millions of financial/economic geniuses in America would love to hear your theory of gold, lol.

 

This is a common misconception.

First of all, the Federal Reserve does not print money.

Think about it this way. Wealth is created everytime somebody performs labor. The more people labor, the more goods and services are available, the more wealth there is. The interest to pay back loans comes from wealth that already exists, ie. from REAL labor that has been performed to create the wealth to pay back the interest on the loans.

 

We are a Keynesian system. This is a fact. We are moving exactly where Keynes intended for us to move, in the manner he wished. This is indisputable, you are wrong.

Recent Nobel Laurettes in Economics have agreed with me. I guess they don't count though in your fantasy socialist utopian world

 

Show me any source of a recent Nobel Laureate in Economics who have agreed that we need to return to the gold standard.

 

Have to agreed with the OP's title: this has definitely been a 'mental' walkthrough.