deflation; where did the money go?

And up is down and the moon is made of green cheese.

Buying a T-Bill destroys money. That is a fact.

You're quite a bit out for the UK. Barclaycard only launched 1966

Numbers and more importantly perhaps usage took a long time to build up.

I can't really find figures going back that far, but look at Graph 11 on here, showing growth in credit card debt since 1994 only.

Neb

Nothing even remotely resembling anything like a fact.

nebulous wrote

That soggy little island is completely irrelevant.

Still nothing even remotely like his 60 years since the great depression.

Still nothing even remotely like his 60 years since the great depression.

showing growth in credit card debt

I would normally ignore your stupidity. But this one is important. When the Government sells T-Bills the money is destroyed. When the government buys T-Bills then money is placed into the economy. When government taxes than money is destroyed and when government spends then money is created. Those are the essential and inescapable facts of the fiat money system. Whether the Virus likes these things or not is irrelevant.

I can hardly believe this theory of Fiat Money. Becaue there wouldn't be enough money to circulate in the economy then. Am I wrong ?

Han de Bruijn

In message , Rod Speed writes

Not to this newsgroup its not.

You are posting in a UK group.

I wasn't referring to his 60 years - I was referring to your erroneous information about credit cards in the 50's.

snip>>>>>>>>>>>>>>>>>>>>>>>>

So when was your depression then?

I show you a huge rise in credit card dept in the 90's and you are saying that isn't 60 years after the great depresssion?

Neb

You can keep making that stupid assertion till the cows come home if you like, changes nothing.

It isnt created and destroyed, its just moved to the govt and then moved out of govt again.

You can keep making that stupid assertion till the cows come home if you like, changes nothing.

I'm certain that neither my parents, nor any of their friends had credit crads in the 1960's. I recall them becoming a mass-market phenomenon no earlier than the late 1970's.

Not every bust is a deflationary one. Nor does every deflationary one follow a credit bubble. My contention is that deflationary busts following a credit bubble are the markets for the end of the generational credit cycle. The cycle itself though will be punctuated with recessions.

The bubbles are not about protecting wealth from inflation. The primary asset though (tulip bulbs, stocks, houses...) isn't chosen at random. There has to be some proximate reason to believe that the object is not only valuable, but will continue to rise in price. By the 1970's in the US and UK, this was already true of housing, which was said to be the best protection of wealth from inflation.

Once the bubble gets going though, the driver is the hope of making money from trading the asset.

FoFP

See Mises.org

FoFP

nebulous wrote

I am actually posting in a sci. group and someone included a crosspost to a uk group.

information about credit cards in the 50's.

It isnt erroneous, its fact. And that fact blows a damned great hole in his claim about 60 years.

And credit card werent the only source of credit in that soggy little island in the 50s anyway.

Plenty of what he claimed didnt happen till after 60 years from the great depression has in fact happened well before that, even in that soggy little island.

isn't 60 years after the great

Nope, I am saying that there was a hell of a lot of the use of credit long before the 90s even in that soggy little island of yours.

So his silly claims about 60 years have blown up in his face and covered him with black stuff, very comprehensively indeed.

M Holmes wrote

in the 1960's.

The technical term for that is 'pathetically inadequate sample'

I built my house quite literally with my own hands using a credit card in the

60s, essentially because I was getting a better return on my capital in the stock market than I was paying in interest and I was interested in seeing if it was possible to build a house entirely on credit, with no cash up front from me. It turned out to be completely effortless and financially well worth doing.

And both my parents had actually lived thru the great depression themselves, and my father had in fact left school to work in a bank during the great depression.

Thats still nothing like your 60 years even if that was true.

And credit cards werent the only source of credit in britain in the 60s anyway.

You didnt say deflationary either, you just said credit cycles.

deflationary

generational credit cycle.

Still doesnt explain what happened after the great depression with your 60 year claim. There was a hell of a lot of use of credit in various forms much sooner than 60 years after the end of the great depression, so your grandparents claim doesnt hold water.

There is no such 'cycle'

great depression.

Yes, but thats nothing like what you said previously.

Thats an entirely separate matter from bubbles.

trading the asset.

Precisely, so nothing like your previous.

The whole thread was posted to uk.finance right from the beginning. You see that line in Outlook Express that says newsgroups? That means you are posting in both sci.econ (that has to be a contradiction in terms if ever there was one!) and uk.finance.

They weren't the only source of credit in the 50's, in fact they weren't a source of credit at all in the 50's. In the 50's many people were still buying houses with cash and certainly not at 5 or 6 times income.

Why are you so hung up on what he was saying? I'm picking holes pretty comprehensively in what you are saying.

Of course there was a use of credit before the 90's, but the 90's was when it really took off. I bought my first flat in the early 80's and had to show a 2 year saving history with the building society before getting a mortgage.

Neb

===================================================> Michael Coburn wrote:

It's patent nonsense.

Yes, it's to the contrary.

The government chronically spends more than it taxes -- see "deficit spending" to an accumulated national debt held by the public of $6.4 trillion so far.

Thus if that silly claim was true, the gov't would have created $6.4 trillion of money by its spending -- indeed "high power" money subject to the multiplier -- and we'd be enjoying hyperinflation like the Weimar Republic or Zimbabwe, pushing a wheelbarrow of cash to buy a loaf of bread today or a stamp tomorrow.

Indeed, here's an emprical check on the claim:

From 3/98 to 6/01 the goverment ran a surplus of $600 billion, that is it taxed more than it spent by $600 billion.

Thus, if the gov't taxing money destroys it and spending money creates it as "essential and inescapable facts of the fiat money system", then then so much taxing in excess of spending must have reduced the money supply by $600 billion -- no small amount!

Instead, between those dates the monetary base increased by $55 billion and M1 increased by $64 billion.

That's a mere difference of around $660 billion from what the claim demands.

The reality is that the US Treasury borrows to spend, just like businesses and people do, and the money held in its accounts is included in the money supply and counted on its books -- as any quick look at the govt's books will show.

So that $6.4 trillion of money for which it issued T-bills and T-bonds was borrowed and spent, i.e. circulated from private sector --> gov't

-- private sector, just as indeed taxes are.

"Circulate" does not equal "create".

When the Federal Reserve buys assets it injects money into the system, and when it sells assets it removes money from the system. But that's another story.

Perhaps the original poster will argue "Federal Reserve = government as a synonym" but 'tis not so.

The Federal Reserve does not collect taxes.

The Social Security Adminstration collects taxes but does not create and destroy money. The money it taxed that sits in its accounts is counted in the money supply, because it *exists.*

it's true. the us dollar is backed by government debt. for every dollar bill the privatley owned federal reserve issues it buys a dollar government bond. the bond must be repaid with interest.thus there is more government debt than there is money in existence and the debt can never be repaid.

this is how the privately owned federal reserve controlls the finances of the united states. it dictates interest rates. it decides how much inflation there will be. it can create booms and busts. no one can trade without debt backed, federal reserve issued currency.

remind me, who does the bible say is the servent, the borrower or the lender?

nebulous wrote

use of the words 'a couple of

hard to swallow.

probably find a reasonable explanation

"credit revulsion" in the debt-deflation and

Never said otherwise. I JUST commented on where I chose to read the thread.

posting in both sci.econ (that has to be

What I said in different words.

claim about 60 years.

in the 50s anyway.

source of credit at all in the 50's.

But there were other sources of credit available in the 50s and his claim was about credit in general, not just credit cards, so he still has one hell of a problem with that 60 year claim even with that soggy little island.

Fuck all were in fact. And it isnt just the 50s that matter for his 60 year claim anyway.

Irrelevant to what is being discussed.

depression has in fact happened well before

that isn't 60 years after the great

with black stuff, very comprehensively

Because it happens to be what I was discussing when you jumped into the thread and made such a spectacular fool of yourself.

Like hell you are. The ONLY thing you have been able to quibble about is whether credit cards were used much in the 50s in that soggy little island and even someone as stupid as you should have noticed that even in that soggy little island, there were other sources of credit available in the 50s and that that is nothing even remotely resembling anything like 60 years after the great depression, so the claim we happened to be discussing about 60 years is clearly just plain wrong, even with that soggy little island.

really took off.

Irrelevant to the evidence that blows a damned great hole in his claim about 60 years.

history with the building society before

I bought mine in the 60s and while plenty did have that sort of requirement, I chose to ignore that requirement myself because I was getting a much better return on my savings than I was paying in interest.

And even your 80s blows a damned great hole in his claim about 60 years anyway.

However, if there is a net credit position, probably due to large budget surpluses, in the govt.'s a/c with the NY Fed acting as its banker, the Treasury Secretary might instruct the Fed to purchase some Treasury Bonds in order to retire them. Kindly correct me if I am wrong.

And, by the way, under Section 13.3 of the Federal Reserve Bank Act, the Fed can buy with money other kinds of notes, etc. Must such money be backed by T. bills or bonds, too?

But isn't it also the case that T. bills and b>

=================================================> > Michael Coburn wrote: