Post
Topic
Board Economics
Re: Hidden Secrets of Money
by
odolvlobo
on 20/03/2014, 22:19:21 UTC
The present financial system is made up of entirely credit that cannot be liquidated. The dollar is a debt instrument that has no terms outlined in its redemption. This means it cannot be extinguished. New debt MUST be created to repay old debt under this mechanism. Eventually the system implodes as we have come close to in 2008. None liquidating debt must DEFAULT. The question is just when.

I don't accept your concept of non-liquidating debt.

I don't see why the current debt cannot be extinguished. The Fed has a balance sheet, and debt (the Fed's liabilities) can be extinguished by trading it for its assets. For example, if the Fed wants to remove $1 million from the money supply it simply sells or redeems $1 million worth of assets (bonds) and the dollars that it receives are gone.