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End of China boom is hurting, but not all is lost, Citi says
Topic Started: 19 Sep 2014, 03:49 PM (2,564 Views)
Garden Variety
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miw
20 Sep 2014, 04:36 AM
They get the excess reserves as a result of the Fed buying securities from them

The fed has absolutely no power to print money.

So how did they buy 4 trillion of securities then?
peter fraser
20 Sep 2014, 01:24 AM
I see that you have lost your "asshole".
taken away more like.
Edited by Garden Variety, 20 Sep 2014, 10:55 AM.
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miw
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John Frum
20 Sep 2014, 08:39 AM
There, fixed it for you
And your point is?
Garden Variety
20 Sep 2014, 10:54 AM
So how did they buy 4 trillion of securities then?
The same way every bank operates when it makes a loan. They created a deposit in exchange for an asset.
Edited by miw, 20 Sep 2014, 04:42 PM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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peter fraser
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Garden Variety
20 Sep 2014, 10:54 AM
taken away more like.
Ouch...
Any expressed market opinion is my own and is not to be taken as financial advice
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Garden Variety
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miw
20 Sep 2014, 04:40 PM
The same way every bank operates when it makes a loan. They created a deposit in exchange for an asset.
Yep, thats how money is printed nowadays

peter fraser
20 Sep 2014, 05:43 PM
Ouch...
An asshole by any other name ...
Edited by Garden Variety, 20 Sep 2014, 06:02 PM.
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szokolay
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Mike
19 Sep 2014, 03:49 PM

I agree with this article.

Bears or bearish people need to start factoring in what a strongly growing US economy will do for Australia and the wider world.
You're going to look pretty silly when the truth about the US economic Not-recovery comes to light. Besides, the US, as far as I can see, adds nothing to the Australian eonomy and in fact is a drag on it. We are the dumping ground for billions worth of pharmacuticals, subsidized by out federal government, and untold millions worth of their rubbish food exports.
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goldbug
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Mike
19 Sep 2014, 06:12 PM



newjez
19 Sep 2014, 04:10 PM
Do ya think she can take it Scotty?

The Dilithium chamber is slightly out of alignment, nothing she can't handle Mr Spock.
Moron alert
Moron alert

It's the dilithium crystals that go out of alignment you idiot. You can't even get the simplest tv show concepts right can you. What hope is their you could understand the dynamics of International economics?
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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Jimbo
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Garden Variety
20 Sep 2014, 05:58 PM
Yep, thats how money is printed nowadays
The US treasury is not allowed to print money so it prints US Treasury bonds (IOU's for money) and then it sells them for electronic dollars.

In order to help keep up demand for the Treasury Bonds, a private bank (The US Federal Reserve) buys the Bonds from the people who bought the original issues (other private banks most likely owned by the same people who run the Federal Reserve Bank). The other private banks make a few bucks for their trouble.

The US taxpayer of 10 or 30 years from now will exchange tax money for Bonds when they mature and will pay the coupon every year until maturity. To make up for any shortfall, the US Treasury will create some new bonds and repeat the process.

The accumulated shortfall becomes the national debt which has a fixed limit that can be raised every time it is reached (after some pretend arguing).

It is a great system and similar to the idea I told you about earlier where you give me $10 and I give you an IOU for $10. We both end up with ten dollars.

Win win all around.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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szokolay
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Few people are aware of the fact that before the great Bison hunts in America that nearly drove the species to extinction there was a similar event with Deer. The trade in deer hide and meat became so widespread that the term "buck" came to be used for a US dollar since they were both forms of currency.

Another little remembered fact is that the US went through a 100 year period of slow economic expansion coupled with mild deflation in prices. The deflation came about because of productivity gains etc and the fact that the currency in use was almost exclusively silver and gold coins. A monitary base that expanded as needed from the supply of new mines.

Paper money was issued by regional banks but was always 100% backed and commercial loans were no where near as abundant as today. More importantly the various governments had to live within their means, within tax revinues, and borrowing by them was rare. This was before the federal reserve corporation of course and before the centralization of power in washington.

Societies always grow more corrupt with time, it's why they always collapse. They collapse from within, because of the corruption. The US is very close to collapse I would say.
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miw
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Jimbo
20 Sep 2014, 07:11 PM
In order to help keep up demand for the Treasury Bonds, a private bank (The US Federal Reserve) buys the Bonds from the people who bought the original issues (other private banks most likely owned by the same people who run the Federal Reserve Bank). The other private banks make a few bucks for their trouble.
Nope. There is no shortage of demand for USTs. And QE had no influence on the rate of issuance of USTs.

The big fear about QE, though, was that it would dry up the supply of USTs. It seems not to have reached that level.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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John Frum
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miw
20 Sep 2014, 04:40 PM
And your point is?
You don't know the difference between a tweak and a distortion?
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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