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shrekgrinch says

SoCal Renter is obviously not a tea bagger nor cares for the views of the tea baggers.
BUT…Vicente seems to think SoCal Renter’s displayed ignorance reflects on the tea baggers.
Nice.

Just because I'm not a Tea Bagger and I don't care for the Tea Bagger philosophy, does not mean I'm ignorant of it. By that logic all US economists who are not Communists and hate the Communist philosophy are ignorant of Communism.

"Printing Money" is a repeated theme of ALL Teabagger groups. This is part of the explanation for hating the Fed and "Hussein" Obama. This is also why Teabaggers are easy marks for the gold hoarding promotions showcased by rightwing AM radio and Glenn Beck. They believe the government is "printing money" and gold will provide a safe haven for inflation.

These rubes foolishly stockpile a metal easily found in the ground while enriching movement leaders. Unfortunately, these Teabag Gold Hoarder people would be better served gaining an education at public university rather than preparing for the end times.

shrekgrinch says

BUT…Vicente seems to think SoCal Renter’s displayed ignorance reflects on the tea baggers.

Not connected, nor did I imply anything about SoCal.

Teabaggers are ignorant. I hung around them in their early days and it was apparent then and just got worse with time as the Sarah Palin and Tea Party Express crowd took control.

SoCal Renter says

By the “printing money” definition used by the elites and you above, I am “printing money” everyday when I go to work and get paid. My labor has been monetized, thus creating more “money” in the system.

You are not increasing the money supply. "Monetize" something means introducing new ("hot") money into the system to buy it.

SoCal Renter says

No one creates money with a few keystrokes. The big banks were making leveraged bets based upon derivatives. It seemed like money on the books, and wall street bankers felt rich. The bets went bad. The US propped up the banks using money borrowed from many lenders including China.

The Fed can in fact create money with a few keystrokes. This is how it pays for things with hot money, typically treasury bonds it buys from the Treasury (or other holders via 'open market operations').

What killed the banks were all the BAD LOANS made. While these were packaged into derivatives (asset-backed securities), it's the nature of fractional reserve lending to have "leverage", the ratio of outstanding loans to unloaned capital in reserve. 30:1 was common.

SoCal Renter says

Some advocate wiping the individual debt off the books. This is far different from “printing money” as the money has already been spent. A few banks might fail and need to be broken into regional banks, but this will benefit the consumer in the long run.

Debt is coupled with savings. Wiping out both does not print money as it destroys both sides of the ledger. Monetizing debt (by preserving the savings side through printing) is "inflationary" though I think the concomitant penalty period restricting access to new credit limits this.

Government prints money [either physically or electronically], it isn't backed by anything tangible. More money in the system = inflation, less = deflation. So essentially government owns everything we own because it controls it's underlying value.

The Fed chairman believes that we have to have constant low inflation as he mentioned on 60 minutes recently. He completely abhores the idea of having deflation. However, there is a huge problem here. The way the inflation is measured excludes practically everything we all use and live off. It doesn't include major items such as gas or food and some other items less common.

Therefore the real inflation out there is much higher for an average American than it is for someone who is so well off they don't notice prices. I am paying a lot more for gasoline than I used to, more for food, more for cable, more for cell phone (taxes went up), more for clothing, etc... yet Fed thinks inflation is non existant.

Fed is very wrong in my opinion, prices have to come down. Otherwise we are suffocating the middle class which gets to pay full price for inflation without extra income to absorb it.

For starters they should include EVERYTHING into the inflation index, so we can calculate the true inflation index. Not fictitious index they use because politically it looks very nice.

ChrisV says

Government prints money [either physically or electronically], it isn’t backed by anything tangible. More money in the system = inflation, less = deflation. So essentially government owns everything we own because it controls it’s underlying value.

Inaccurate on several fronts. Firstly most "money creation" comes from banks, not from government. Secondly inflation is also driven by the "velocity of money" not just it's quantity. Money under a mattress or on the balance sheet of a cash-rich corporation isn't inflationary. Money circulating from your employer to you, then from you to neighborhood shop, then from that shopkeeper to suppliers, that is money in motion. Even with a static "quantity" of money if you increase velocity it's inflationary. Another reason that driving interest rates down to 0% stimulates the economy from Bernanke's perspective, it makes CD's unattractive and encourages speculation. There's a whole lot of policy moves that push inflation that have nothing to do with "printing money". A great deal of "inflation" we see is the result of commodity speculation on consumable items like food & fuel. On the other hand real estate & paychecks are declining, which is deflationary.

I realize I don't know all there is to know about economics and money myself. But at least I KNOW that I don't have the full picture. Unlike the average Teabagger I run into who is certain it's the END TIMES and we'd better hoard gold & bullets because the Amero is going to be toilet paper next week.

ChrisV says

The way the inflation is measured excludes practically everything we all use and live off. It doesn’t include major items such as gas or food and some other items less common

Yes it does. There is an overall number and a core number. Both are measured.

Vicente says

ChrisV says

Government prints money [either physically or electronically], it isn’t backed by anything tangible. More money in the system = inflation, less = deflation. So essentially government owns everything we own because it controls it’s underlying value.

Inaccurate on several fronts. Firstly most “money creation” comes from banks, not from government. Secondly inflation is also driven by the “velocity of money” not just it’s quantity. Money under a mattress or on the balance sheet of a cash-rich corporation isn’t inflationary. Money circulating from your employer to you, then from you to neighborhood shop, then from that shopkeeper to suppliers, that is money in motion. Even with a static “quantity” of money if you increase velocity it’s inflationary.

Yes, what I'm referring to is money supply. If more money is there, it will be used and it will be inflation. I know what you are saying, if its not used it's same as it's not there. However, if out of pure circumstance it is sitting under the corporate mattress or you are not seeing it being used... its only a matter of time before it will be in circulation. Putting more money into the system like that is an equivalent of setting up a financial time bomb.

There is a very important factor to note. This can [and will] create huge asset bubbles which aren't seen immediately. For example earlier we had an asset bubble in housing, there were other bubbles before that... that did come from easy money policy. Depending on a sector where easy money will concentrate bubbles will occur.

New game on wall street is shorting the dollar.

ChrisV says

New game on wall street is shortening the dollar.

Won't we have to change out all of the bill changers if we do that? I like the dollar the same size it is now.

Or perhaps you are talking about baking with the dollar - make sure you get new notes ... you never know where those filthy old dollars have been - especially the $1 bills.