Quote from: jtimon on June 29, 2011, 10:51:38 AM

Quote from: anderxander on June 28, 2011, 10:26:26 PM

Quote from: jtimon on June 28, 2011, 12:42:37 PM

Quote from: anderxander on June 28, 2011, 12:10:01 PM

Quote from: Findeton on June 28, 2011, 06:05:22 AM

Quote from: michele.siciliano on June 28, 2011, 04:19:58 AM

HI Lightrider, why don't you elaborate a post that would put some light on the mechanics of the current monetary system ?

Because he believes that dollars are debt.

Dollars are debt. The creation of dollars starts with loan origination. All dollars are brought into existence through loans. All dollars represent debts.

Not always. The fed issues dollars simply by buying things. If what they buy is, for example, US bonds or a debt (at interest) from a bank, then you're reasoning can be applied. But they can buy stocks, ETFs, gold, bitcoins or just tons of shit if they want.
Not that I like the Fed, but that's how it works.

Yes they can only after the dollars have been created by buying bonds and using them as the basis for new loans and money creation.

They don't just print dollars and buy whatever. Read modern money mechanics.

Yes all federal dollars are debt.

I can't find a paper from the fed where they say literally that they issue dollars simply by buying things.
But I found this:

http://www.frbsf.org/education/activities/drecon/2002/0209.html
http://en.wikipedia.org/wiki/Securities

It seems like you were right when you said they can't buy whatever they want, but they definitely can buy things different from US bonds.
Gold certificates or SDRs, for example, don't sound much like debt.

Buy SDRs? They are not for sale.

Their gold holdings are from the 70s when they confiscated the united states gold and left the gold standard.

The feds holdings serve as the reserves for the creation of loans inside the banking system. Chase, us bank and every bank in the country is a member of the federal reserve system. They put the nation in debt and manage the nations credit through the banking system and loans. They have a monopoly on money creation and control the price of money and subsequently the price of all goods and services.

All federal reserve dollars represent debts in the system. All federal dollars are debt, not all money is debt.

Dollars are only created when someone goes in debt to the banking system. Whether its a car loan or government spending.

http://en.wikisource.org/wiki/Modern_Money_Mechanics/