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View Diary: Iraq and lessons for the 'war on the deficit' (113 comments)

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  •  The reason the treasury borrows money (0+ / 0-)

    by selling bonds - and the treasury buys them - is to be able to control inflation.  That's the only reason.

    "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

    by SueDe on Sun Mar 24, 2013 at 03:39:51 PM PDT

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    •  Close......general inflation.... (0+ / 0-)

      also called demand-pull inflation (the classic too many dollars chasing too few goods) is wholly dependent on the economy operating at full capacityemployment.  Otherwise, any extra money injected into the system gets absorbed in increasing the production of goods and services (I.E. bringing down unemployment).
      The Fed manipulates the INTEREST RATE by controlling the amount of reserve cash in the Federal Reserve banking system.  Too many Reserves (not enough USTreasuries availabile) = abundance of cash = low interest rates.
      Scarcity of reserves (all free cash tied up in UStreasuries) = scarcity of cash = high interest rates
      pretty standard supply and demand.

      MMT =Reality

      "The Earth is my country and Science my religion" Christiaan Huygens

      by Auburn Parks on Sun Mar 24, 2013 at 03:53:13 PM PDT

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      •  Except when Bernanke promises a trillion dollars (2+ / 0-)
        Recommended by:
        Buckeye Nut Schell, lotlizard

        to buy worthless bonds (chits) from the super wealthy and financial houses that will NEVER put that money into the economy.  
        They might put a bit of it into commodities (like precious metal, oil or grains) which will only drive up prices (which is happening and causing food riots around the world) for workers. But, the super wealthy are NOW impervious to all opposition.
        The whole 'system' is rigged and we're f....d. Dems (Durbin, etc) refuse to protect SS and won't stand up to gun manufacturers, allow states to be handed over to managers (who will decimate education and sell off public assets to to the de Vos' and Koch's) lead to a realization we are not going to get out of this trap the few super wealthy have created and are managing. We don't even have influence w/in our own party.

        "I freed a thousand slaves, I could have freed a thousand more if only they knew they were slaves" Harriet Tubman

        by BrianParker14 on Sun Mar 24, 2013 at 05:54:32 PM PDT

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