Quote from: lisagurl on July 21, 2009, 08:23:11 AM
... Remember money does not come from the thin air . ...

Actually, Lisa ... it does "come from thin air." The central banks establish "money," and they establish it out of thin air. Go read a bit about the Emperor Norton who passed out his own "money" for exchange in SF in the 1800s. He may have been thought of as delusional and crazy, but his "tender" was accepted and he was able to buy goods with it.

The same principle works for "money." It's ephemeral and is based on the belief in it by the population that uses it.

How did that $1 trillion + get doled out by the Fed to the banking/insurance system recently? The Fed "made the money out of thin air."

QuoteHow did that $1 trillion + get doled out by the Fed to the banking/insurance system recently? The Fed "made the money out of thin air."

It relies on faith in the system. Faith only goes so far and the future generations will be responsible for the debt, be it inflation, taxes or reduced lifestyle but requiring more work.  Plenty of products are sitting in the trash heap and unpaid credit cards bills as the national debt climbs. Now the Chinese are working their asses off in the promise that they will get paid later. When later never comes they just might try to take it. Nothing is free.

QuoteMr. Wessel says, all "had a gut sense that the U.S. economy was overdue for a financial crisis of some sort" before the catastrophic events of last fall, but "no one at the Fed" rang "the gong and warned investors, lenders, business executives, and consumers that years of easy credit even for risky borrowers, placid markets, and shared optimism were unsustainable."

Ir's rather ironic that so many of the "capitalist fat cats that exploit the workers" are Chinese business people.  In fact, there is a rapidly swelling divide between the ever wealthier middle class and the working class.

Power and money; probably the two most corrupting influences there are.

Just curious. How are "It's ephemeral and is based on the belief in it by the population that uses it." and "It relies on faith in the system" different from each other?

Exactly! They are not. Money=fantasy. But a fantasy that has a rather hard edge to it since practically everyone believes it's there.

Quote from: Nichole on July 21, 2009, 10:50:38 AM
Just curious. How are "It's ephemeral and is based on the belief in it by the population that uses it." and "It relies on faith in the system" different from each other?

Exactly! They are not. Money=fantasy. But a fantasy that has a rather hard edge to it since practically everyone believes it's there.

QuoteMr. Wessel says, all "had a gut sense that the U.S. economy was overdue for a financial crisis of some sort" before the catastrophic events of last fall, but "no one at the Fed" rang "the gong and warned investors, lenders, business executives, and consumers that years of easy credit even for risky borrowers, placid markets, and shared optimism were unsustainable."

Quote from: Nichole on July 21, 2009, 10:50:38 AM
Just curious. How are "It's ephemeral and is based on the belief in it by the population that uses it." and "It relies on faith in the system" different from each other?

Exactly! They are not. Money=fantasy. But a fantasy that has a rather hard edge to it since practically everyone believes it's there.

QuoteMr. Wessel says, all "had a gut sense that the U.S. economy was overdue for a financial crisis of some sort" before the catastrophic events of last fall, but "no one at the Fed" rang "the gong and warned investors, lenders, business executives, and consumers that years of easy credit even for risky borrowers, placid markets, and shared optimism were unsustainable."

And your point, other than just placing Mr. Wessel (Horst?) further down the page than before is what?

Mr. Wessel appears to be saying exactly what you and I have said: that belief is the bedrock of money.

Beliefs only last as long as they are not challenged. Shared optimism as a fantasy is not lasting. Even In ECO 101 the professor held up a reserve note. The students rather have the silver certificate. The population (especially the wealthy) has a lot of doubt about the value of American currency. Many are diversified around the world and there are countries like China and India calling for a new world standard as our credibility is falling. Some of the highest power brokers in the world are calling for a new world order.  Both you and I have lived through periods of high inflation.  I do not keep paper or any money in my mattress. When the majority has nothing to lose then you will see a revolution.  All ready places like France, Greece, China, India, etc. are dealing with unrest due to losing belief in the governments.

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Post Merge: July 21, 2009, 07:58:31 PM

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QuoteNew York state and New York City have agreed to pay a total of more than a half billion dollars to settle federal allegations that they knowingly submitted false Medicaid claims for more than 10 years, the Justice Department announced Tuesday.

The states are committing fraud on the federal medical program just think what a free for all it will be with a national system.