XPost: alt.politics.usa.congress, alt.atheism, talk.politics.misc   
   XPost: alt.politics.usa.democrats, alt.politics.usa.republicans   
   From: Intelligent@savetheworldmsn.com   
      
   On 10/31/2021 5:38 PM, Intelligent Party wrote:   
   > And free cash, of half the minimum wage, should be transferred to all non   
   earning   
   > adults.   
      
   The U.S. dollar, like almost all currencies in the world is a fiat currency.   
   Still, Congress keeps track of it, by taxing or selling bonds to spend money.    
   The   
   Federal Reserve exercises monetary policy to buy the bonds and stimulate the   
   economy, or sell bonds itself to effect a contraction and act against   
   inflation.   
   The Federal Reserve DOES create money out of thin air, or bonds out of thin   
   air if   
   it needs to.  But the point to get about fiat currency, is that spending goes   
   to   
   the trade-off between interest rates and inflation, and the Federal Reserve   
   manages these.  It COULD write off all the bonds it buys from Congress, and   
   reduce   
   the so-called "National Debt."   
      
   The Macro-Economy is a trade-off between: Unemployment vs. Inflation vs.   
   interest   
   rates, vs. Price to Book Values (stock market inflation).   
      
   Stimulating the economy through fiscal (Congressional) spending, or the Fed   
   (monetary) buying bonds, increases inflation and reduces unemployment.  In the   
   case of monetary expansion, this is done through a lower interest rate, which   
   may   
   increase stock market price-to-book values, as money seeks higher returns in   
   equities rather than debt.  When bond prices go up, due to Fed purchases of   
   bonds,   
   interest rates go down.  The people who sold the bonds buy stocks and stimulate   
   the economy, employing more people, until the economy attains full output for   
   the   
   existent capital of the moment.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)