1 thought on “The relationship between the upper limit of the US debt and the printing of money?”
Tyrone
It doesn't matter. Debt is a fiscal policy; money printing is a monetary policy. According to US law, they are independent of each other. The debt finance means that the government has to spend money, but there is no money, so it needs to be borrowed. This is not a money printing, which is a liquidity transfer. Take the money that others don't spend. Then pay the interest and return the principal after expiration. The monetary policy of printing money is because the market currency demand is greater than the currency supply. The US federal reserve system needs to carry out expansion monetary policy to provide currency and meet transaction demand.
The debt crisis in the United States is due to the upper limit. If there is no upper limit, the United States will buy it as long as the US debt is issued. The United States and Greece are the number one power in the world, and the US dollar is the world currency. As long as international transactions are settled in large dollars in large commodities, gold, futures, and petroleum, the demand for the US dollar will not decrease. Treasury bonds can always be sold. As long as the United States issues government bonds, you will not worry about it, there will be no crisis. The so -called bankruptcy credit decline is a nerd's remarks. Only when the United States is no longer the number one superpower in the world can we not borrow money. The one you said, after the crisis, will cause insufficient liquidity, which is correct. Is about the second one, because the goal of the Federal Reserve is actually to maintain liquidity, and whether the economy can grow later, it has to rely on the market. And it is not to avoid crisis. The Federal Reserve is actions afterwards. Correctly, it should be the impact of hedging crisis. In fact, the short -term monetary policy of the Fed now has basically failed. The short -term interest rate in the United States is close to 0. Investors are almost completely unspealable, and traditional monetary policy fails. According to the Nobel Prize Economist, Cruggman believes that the liquidity trap of Keynes predicted in the US economy.
It doesn't matter. Debt is a fiscal policy; money printing is a monetary policy. According to US law, they are independent of each other.
The debt finance means that the government has to spend money, but there is no money, so it needs to be borrowed. This is not a money printing, which is a liquidity transfer. Take the money that others don't spend. Then pay the interest and return the principal after expiration.
The monetary policy of printing money is because the market currency demand is greater than the currency supply. The US federal reserve system needs to carry out expansion monetary policy to provide currency and meet transaction demand.
The debt crisis in the United States is due to the upper limit. If there is no upper limit, the United States will buy it as long as the US debt is issued. The United States and Greece are the number one power in the world, and the US dollar is the world currency. As long as international transactions are settled in large dollars in large commodities, gold, futures, and petroleum, the demand for the US dollar will not decrease. Treasury bonds can always be sold. As long as the United States issues government bonds, you will not worry about it, there will be no crisis. The so -called bankruptcy credit decline is a nerd's remarks. Only when the United States is no longer the number one superpower in the world can we not borrow money.
The one you said, after the crisis, will cause insufficient liquidity, which is correct.
Is about the second one, because the goal of the Federal Reserve is actually to maintain liquidity, and whether the economy can grow later, it has to rely on the market. And it is not to avoid crisis. The Federal Reserve is actions afterwards. Correctly, it should be the impact of hedging crisis. In fact, the short -term monetary policy of the Fed now has basically failed. The short -term interest rate in the United States is close to 0. Investors are almost completely unspealable, and traditional monetary policy fails. According to the Nobel Prize Economist, Cruggman believes that the liquidity trap of Keynes predicted in the US economy.