Post
Topic
Board Economics
Re: Is there room for a State Run Cryptocurrency?
by
tee-rex
on 04/08/2014, 07:27:41 UTC
No, that was not my claim, you just see what your eyes want to see. I was not talking about QE "printing money". There is no inflation out of this, since the QE money doesn't leak into circulation. I was talking about how debts are socialized and the burden of them is passed on to the taxpayer in general (by means of inflation).

Is this your original claim?  that if FDIC needs money.  Fed prints money.   Inflation follows.   Taxpayers "pay the debt" of the FDIC via "debt socialization"

You might have noticed (well, you actually didn't) that I was talking about how socialization of debts works, and I specifically mentioned "in general". Regarding the FDIC, I don't know how much money they might potentially need, but if you insist, the answer is affirmative. In the worst case scenario, the sequence you described would necessarily lead to inflation (since the money "lost in debt" didn't disappear but just changed hands).

In the event that the FDIC fund is insufficient,  the FDIC has credit at the Treasury.   The Fed isn't even in the picture.  Theres no protocol so an act of Congress is probably required to do what you are suggesting

Even if the Fed lends them money,  then the borrower (FDIC)  pays back the loan not taxpayers.   

Do you know what the word "indirectly" means, which I used in respect to ordinary people paying for the bank debts? What regards the real world evidence of debt socialization, Google is your friend (I hope you understand that you are presently not in the position of asking me to prove you anything).