Our understanding of monetary system is wrong?

I have no problem with a bank charging interest on their money or their patrons money

But why should the have and control the money supply, and profit from money they didn't earn

 

Why should the government borrow something they have the constitutional power to create themselves

it doesn't matter were you get the money supply in terms of borrowing. the only thing that will stop over borrowing or money creation is complete transparency and a vigilant populis

but i think we're saying the same thing

 

The problem is that the constitution does not say "not delegable power". So............congress can delegate power. Some countries have added the not delegable power closure.

 

but i think we both know what the intent of it was.But they twist and turn and analyze certain words and paragraphs to death until they find some logic that fits their agenda

 

Yes, we are saying the same thing at some level. The rationale for borrowing vs. printing is the difference in effective interest rates and the impact on long-term growth rates. For many countries, it seems to be much cheaper to borrow $1 trillion (and keep prices stable) than to print and circulate $1 trillion (and create inflation).

 

well i guess we aren't talking about the same thing

when the government barrows from the fed, the fed creates that money so the result is the same as far as inflation is concerned.

so their is know sane reason to let the fed and their stock holders profit for something we can create ourselves

 

I agree that when the govt borrows from the Fed, the Fed printed the money. But when the govt borrows from the Chinese or from private investors looking for a "safe" place, then no money is printed. T-bill auctions don't involve printing money, only a lending of money already in circulation.

Once the Fed starts really buying T-bills with printed money, we'll see a real fecal-turbine collision. Private or sovereign holders of T-bills will dump treasuries once they realize that no other third-party is willing to buy them.

 

I agree. One of the best threads I've seen on here in quite a while.

 

I like to think of it in slightly more simpler terms: every dollar above the mean marginal extraction & refining cost you pay is the "premium" on the catastrophic downside protection insurance policy you're buying.

 

They may or may not. Many will be wiped out by all the forward sales they've already made, or hedges on their expected production (if they are companies).