tag:blogger.com,1999:blog-1213331072378388884.post8987522129447952092..comments2024-03-19T08:45:10.745-05:00Comments on Hayward "Blah, Blah, Blah" Blog---Just a (Retired now) High School Economics Teacher. That's all...: Dollar Depreciates as Federal Reserve signals more money is on the way to the marketplace...GeneHaywardhttp://www.blogger.com/profile/08848814178464097668noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1213331072378388884.post-34903286742303994462010-09-25T06:21:20.471-05:002010-09-25T06:21:20.471-05:00Hello, Gene! I like your simple examples, by the ...Hello, Gene! I like your simple examples, by the way.<br /><br />1. On the difference between real money and credit -- "Of this $10 only $1.00 is "real money" and $9.00 is credit."<br /><br />The thing that concerns me is <i>cost</i> -- interest, the factor cost of money. (Adam Smith merged capital (money) with capital (equipment), and interest with profit. But in Smith'sThe Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-1213331072378388884.post-25400307264827467542010-09-24T19:36:52.336-05:002010-09-24T19:36:52.336-05:00Art...Be patient with me as i use a simple example...Art...Be patient with me as i use a simple example to illustrate what I think you are tying to say (I concede I may not be drawing the correct conclusion)..When I teach the fractional banking system I teach it as follows. The Fed buys a bond for $1.00. A bank now has one real, physical, dollar. Assume the Res. Req is 10%, hence the money multiplier is 10 and the potential increase in the money GeneHaywardhttps://www.blogger.com/profile/08848814178464097668noreply@blogger.comtag:blogger.com,1999:blog-1213331072378388884.post-4751985017475418492010-09-22T23:55:15.979-05:002010-09-22T23:55:15.979-05:00Gene, help me think this through...
If the Fed pr...Gene, help me think this through...<br /><br />If the Fed prints a dollar and uses it to buy an "asset", then after the transaction the seller has an extra dollar. That's why "Quantitative easing is broadly viewed to be corrosive to a currency's value." Understood.<br /><br />If the Fed prints a dollar and uses it to pay down my mortgage, then during the transaction $1The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.com