how can you compare bitcoins vs Vincent’s stonks list? It’s like comparing apples vs Oranges. It’s like comparing your typical robinhood, wsb, WEBULLS, Reddit degenerate gamblers vs a professional daytrader/swing traders.
The only reason I posted it is because it has the word "stonks" in it. You really don't know my style yet 'round these parts. Hehe.
It's wrong to imply that the Fed influences inflation through money printing. We ought to stop saying this. It is quite misleading. The Fed can influence inflation. And the Fed does "print". But only Congress can influence inflation via "printing"!, and only Congress can influence inflation via fiscal policy! The Fed has zero control over the amount of new money it prints. (vide infra) I am using a model where Treasury securities are just an interest bearing store of money that are convertible to the spendable, non-interest bearing form of money. In other words, the model treats Treasuries as just another form of money. The fed has control over how much money in private sector economies appears as bank reserves and how much appears as Treasury Securities, but it has no control over the sum of bank reserves plus Treasury Securities. Both the amounts of Treasury securities sold and the amounts of fiat money created is controlled by Congress when it determines how much to spend and how much to tax. Neither the Federal Reserve nor the Treasury control these amounts! I refer to the money Congress causes to be printed by the Fed due to deficit spending as "outside money", regardless of whether it appears in the economy in the Form of U.S Treasury securities or in the form of bank reserves. There is another kind of money, however. It makes only a temporary appearance in the economy. This I refer to as "inside money". What the fed influences, indirectly, and thus it exercises some control over the amount of it, is this "inside money" created within the private sector economy. This is the money created through fractional reserve banking. It may be variously called temporary, or credit, or "inside money". The amount of this inside money in private sector economies is a function of private sector demand, which both Congress and the Fed have some, but generally weak, influence over: the Congress via fiscal policy, and the Fed via it's control of the price banks have to pay for the money they lend (the Fed Funds rate). The Fed can also influence other interest rates and the shape of the yield curve via monetary policy actions. "Money Printing", i.e., the creation of , and furnishing into the private sector economy of, new, semi-permanent money only occurs after Congress authorizes expenditures in excess of revenues. The Fed has no control over this. even though some past and present Fed Governors have referred to "money printing" giving the false impression that the Fed somehow determines how much new money will be "printed." They don't! It may appear that the Fed is "printing" when it buys Treasuries from the private sector. This may even be referred to by some as "printing." It is an illusion however, as when the entire operation is taken to its conclusion it will be easily recognized that no net printing of new money has occurred. The total of outside money in its spendable form plus its non-spendable Securities form in the private sector has not been changed by this operation. The only thing that has occurred is an exchange of the non-readily spendable, interest paying, kind of money for an equivalent amount of the readily spendable kind of money in the form of bank reserves. Let's reiterate. The only time new outside money is created, i.e., "real printing", occurs when the Central Bank covers a net Treasury overdraft caused by revenues falling short of expenditures. In other words, the only way for new outside money to get into the private sector is for Congress to engage in deficit spending! Without deficits there would be no money in a fiat money regime! (I'm ruling out stealing) As you can see, running deficits from time to time is absolutely essential. The issue then is not whether there should be deficits, there must be! But what size should those deficits be and how do we keep them in line with growth in productivity? If we do that perfectly we should experience little or no net inflation over time caused by deficit spending, but we can still have inflation from other causes for too much money chasing too few goods and services, as Freeman might have put it. Let's not forget however that there is another kind of money, i.e., credit money. That's temporary money, and there can be too much or too little of it. The Fed and human nature play leading roles in determining how much credit money there shall be. Credit money is the big player (typically anyway) in determining what we call the money supply. "Outside" government money created by deficit spending furnishes the seed for credit money. Outside money is the minor player, and "inside" or "credit" money the major player in determining the "money Supply." To summarize: 1) The Fed can and does "print" whenever it covers a Treasury overdraft, but it has absolutely no control over how much is printed. That's strictly controlled by Congress indirectly when the level of spending and taxing is determined. 2) The Fed does influence, usually quite weakly, the demand for "inside" money created via fractional reserve banking. They exercise some control over the money supply at any given time, because credit money is the major component of what we call the money supply in the private sector economy. It is through its influence on demand for money that the Fed may exercise more or less control over inflation, depending on its root cause.
instead of arguing about fed this or fed that or "printing" how about checking out this treasury stonk play: tnx