Can or does the federal government create money with out printing actual currency or borrowing via treasury notes or bills? Can it pay large contractors by just issuing a government check with no offsetting entry or can it put money into the Federal Reserves system for the Fed to loan to member banks and not create a liability that they have to repay??? Im thinking the country owes so much debt already that at some point other countries will quit buying our treasury obligations and the only way the government can pay its obligations is to just print US treasury checks which at some point would become worthless… It appears to me we are headed that way…. can or are they already doing it????
Most Commented Posts
- August 8, 2008 -- Should "In God We Trust" Remain On American Currency? (41)
- February 26, 2009 -- Xtian: What right (specifically) would be violated by removing "In God We Trust" from US currency? (41)
- January 27, 2010 -- Do conservatives invest in gold because they have no faith in American currency? (37)
- November 24, 2008 -- Is “In God We Trust” on US currency a true statement? (35)
- January 3, 2009 -- Should the motto “In God We Trust” be removed from U.S. currency? ? (34)
- March 17, 2009 -- R&S what do you feel about "One nation under God" on US currency? (34)
- April 21, 2009 -- What would be the impact on American society if "In God We Trust" were removed from the currency? (34)
- May 7, 2008 -- Who else thinks that "in god we trust" should be removed from US currency? (33)
- January 9, 2009 -- Are coins and currency the same thing? (30)
- March 8, 2010 -- If your good looks were currency, what could you buy? (30)
This entry was posted
on Monday, March 2nd, 2009 at 7:30 am and is filed under Currency Trading.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
March 2nd, 2009 at 7:30 am
Yes - and in several different ways.
In fact, to physically print currency, there has to be a backing of treasury notes. "printing money" as a euphemism of "creating money" is not accurate.
But it is in almost every government's interest to debase their money. People have been doing it with gold and with representative money as well as with fiat money.
And Americans have been doing it since colonial days.
http://en.wikipedia.org/wiki/Colonial_scrip
Even countries that want their central banks to control inflation set a target of 1-2% and Congress wanted the fed to consider employment and economic growth as well as inflation.
Also note that the Federal Reserve can create money just by changing the reserve requirements. This isn't money that the government can spend, but it is still very real money in the economy:
http://en.wikipedia.org/wiki/Fractional-reserve_banking