/biz/ - Business & Finance

>he fell for the print new money meme
surest sign of a newfag ever

Yeah it would be kinda hard to print gold and silver. Why would you think federal reserve notes are actual money?

>>22874563
The Brrrrr meme got way overplayed.
Deflation is going to rip everyone a new asshole.

>>22874563
Lol, did the Bond King bring you here?

>>22874563
>yfw money is created through lending (debt)
>yfw money is destroyed when people default on loans
>yfw landlords and homeowners have stopped paying their mortgages
>yfw millions of jobless wagies won't be able to pay their credit cards and car notes

>>22874784
*in a debt based system

>>22874563
The Jews control it all so what’s the difference

>>22874563
>Fed starts a round of OMO for QE
>Primary Dealers get the shopping list at the NY desk: BONDS
>Primary Dealers begin buying bonds at bond auction
this is where I'm stuck, it either goes
>A. PDs credit a insta-deposit to the US Gov account (literally printed money) and take the bond (source, Jeff Snider, Luke Gromen, and friends)
>B. PDs transfer their own cash from operations to the US Gov deposit account and take the bond (Bond King, Brent Johnson, and friends)

afterwards Fed gets the bonds and PDs get bank reserves. The minutia of the PD transaction matters bigly though. What am I missing here?

>>22874563
based and jeffery sniderpilled

>>22874845
To believe B you have to believe that these primary dealers have literally trillions of dollars in free cash just sitting around, and they choose to use it to buy treasuries that are in all ways except nominally negative yielding.

It's actually much worse

Money printing would actually be a good case scenario, in reality the government sells bonds to (((banks))) who then charge interest LMAO

it's an interesting moment because i have no doubt that in a year or five when retrospectives are being written about this 6 or 8 month period between the March 18 crash and whatever Event is looming over us now, people will write "It was so obvious! How come they didn't see it coming?" but right now we're arguing over what will happen

Two words anon. Debt Strike.

This is how we take it all back

>>22874923
i guess the real questions is inflation or deflation, but yeah this is crazy shite m8. thats why i got my shit in precious metals

>>22874899
Yea but I'm surprised at how hard it is to find any info on this.

This is from 1990
https://www.minneapolisfed.org/article/1990/open-market-operations

>the Federal Reserve will take delivery of the purchased securities from the banks that handle deliveries for the dealers—the clearing banks for nonbank dealers.

>As authorized by these banks, it will deduct these securities from the book entry list of their holdings at the Federal Reserve and add them to the System Open Market Account.

>In return, the banks will receive credit that day to the reserve accounts they maintain at their Federal Reserve Bank.

>>22875129
It seems obvious deflation should occur. But I kinda doubt the fed will let it happen. Let housing and stocks collapse. If the fed can’t lower rates or do anything, Congress will just amend the fed act to let them send payments to the American people directly. They don’t have the balls to let it all deflate. Something big would happen before deflation. Devalue the dollar in some way. I can’t imagine know it all ass hole bankers would just sit buy and let the ultra rich lose money.

>>22874563
>he took the steven van metre pill

>>22875188
If Biden gets in, expect mass debt cancellation and inflation as a result.

>>22875182
Yeah and then another follow up question is, can primary dealers loan to each other?
Bc if so if I was a primary dealer I would just buy Treasuries, flip them at a 1% profit to the Fed, and then loan at a 0.5% loss to another primary dealer who does the same thing. Boom, we both now have a way to get infinite 0.5% profit and convert all our reserves to cash.

>>22874563
>all they can do is create bank reserves

which is exactly the same thing as printing new money.

Just think what would happen during deflation, the poor could afford homes. The poor could buy into the stock market. Why the fuck would our leaders ever let that happen? It makes no sense. Every policy in the last 100 years has led to the poor being less and less able to be apart of society. Unable to buy a home, unable to start a business, unable to save. I’d be shocked if deflation ever happens. It would be a bigger shock than Trump winning. Bankers will never let you own a home.

>>22875226
Not really, reserve requirements are now 0% so the banks don’t actually need them to (((make loans)))

>>22875216
Trump actually mentioned something about wanting to devalue the dollar. He’s an expert at bankruptcy. I could actually see him doing something wild when the system tanks. Debt jubilee or devaluing the dollar. Ending the dollar reserve status. A weak dollar means industry is able to come back to the u.s. Also means everyone holding dollars gets wrecked. But who knows what’ll happen. I just assume that if anything big starts to roll, they’ll change the rules as they go along.

>>22875295
Historically at least, FDR had a debt jubilee, depreciating US bonds by 40% after confiscating gold and changing the valuation ratio by decree. It helped the farmers who had been suffering from expanding debts and deflation for generations, but obviously all bond holders got absolutely rekt. There are parallels to that time and today.

>>22875326
Exactly, everyone was probably like deflation is coming! Dollar will be king! Then they change the rules, gold explodes, after it was stolen, and dollars lost value. Change the rules as you go. Makes for a wonderful system.

Given that the dollar was backed by gold idk if my post above made complete sense, but close enough.

bump

>>22874563
which steals you money and gives it to them you loser

>>22874644
No, we are going to experience hyperinflation.

>>22874563
>tfw banks are the only ones that create new money these days

>>22874563
Based and accounting-pilled.

>>22874639
>le assets are real money meme
Tip of the hat to you good sir

>>22875182
>>22874899

OK I"m back from a 3 hour deep dive and I still cannot come to a conclusion on this >>22874845

Some sources even suggest that the Fed loans settlement balances to the Primary Dealers who buy the treasuries at auction, then the Fed credits the Dealers' account with another settlement balance, cancelling the loan...

But what kills the smart brain econ deflationary fags is this:
>Banks with reserve accounts at the Fed can exchange their settlement balances for cash to increase their vault cash for meeting window demand.

So there you go. If a bank wants to make a run on itself tomorrow ITS ALL PRINTED MONEY

>>22877334
thank you

>>22877334
Oh and it gets better
>Don't worry anon banks can only use their bank reserves to lend against them. They have to meet reserve requirements

As of March 2020 the reserve requirement in the US is 0%. In other countries it has been 0% for years

https://www.federalreserve.gov/monetarypolicy/reservereq.htm

Banks can literally create new loans with no reserves. Bank reserves are for enabling inter-bank settlements which includes converting to bank liabilities (CASH!)