The US government does not print dollars. It sells debt
I hear you and this sounds workwise.
But what about the deficit spending money that is given away in all the many many social gives me that programs?
Are these debts too and of so when do we get something back labor wise?
That trillion dollar platinum coin syndrome or just a money printing press?
Money is “printed” a handful of ways:
1. The Fed buys securities from financial institutions. In this case, the FIs see their cash accounts increase as their securities portfolios decrease. That increases money supply. In accounting language, debit checking account, credit securities. The Fed doesn’t move cash from its accounts - it’s an electronic creation of money.
2. Banks make loans. In this journal entry, loans are debited and checking accounts are credited. This, too, is an electronic creation of money. There is a bit of a feedback loop on this part and #1, especially If the government changes reserve requirements to facilitate loan/money supply growth.
3. In theory, the Fed’s operating expenses of about $9bn annually are a source of “printed money.” This is a drop in the bucket.
When the Treasury sells securities for spending, the ledger entry is debit cash, credit debts payable. The govt then splurges with that cash, so on a net-net basis, M2 is flat.
The Treasury COULD opt for spending by debiting cash and crediting federal debt….THIS is the “print money” fear in most people’s minds that drove inflation in economics historically.
Very good question.
"Money" is simply a claim on debt - with "debt" being a claim on the future labor of the debtor, or claims on the future labor of others (money) that the debtor will use to pay installments on the debt.
In other words, we have a major shrinkage of US money in the global economy, and most all countries settle international trade in dollars (electronic, not printed).
This also means that we are having a crash in the amount of debt, since money is simply a claim on it.
This leads to a global recession, and very possible depression. (Not enough money against a set of goods and services).
How does a debt-based money supply seek to fix this? By increasing the amount of debt held as quickly as possible - seeking to slow down and hopefully reverse the crashing money supply (crashing debt - sometimes by entities walking away from debt owed meaning the "claims" on their future labor cease as well as the money that was represented by it.
What's the best way to create debt fast, in a cyclical manner? War.
War supplies are very expensive, and need to be replenished very quickly. Governments have historically sought to correct economics recessions/depressions by warfare - often funding both sides of the conflict, as the US is doing with Israel and Hamas.
What are other ways of creating new debt?
By forcing a change in tooling and infrastructure within an economy.
Does anyone really think the government cares about "climate change" or "electric vehicles"?
Not at all. They care about forcing an entire economy to use these things so that massive amounts of new debt need to be created to make it happen.
Remember - debt (which money represents) is always decreasing, either through payment of principal or default.
If new debt stops being created then things get economical bad very fast.
It's all a game.
If one owns US Treasury securities then one has a direct "claim" on the future labor of others.
If one has physical cash then one has a "claim" (cash) to a "claim" (the US Treasuries backing it on the Fed balance sheet) on the future labor of others. It's a second derivative.
Buying precious metals with cash makes those metals a third derivative - a "claim" (gold/silver) to a "claim" (cash) to a "claim" (US Treasuries backing the cash on the Fed balance sheet) on the future labor of others.
Bottom line - seek to hold first-order claims on debt. That will have the highest order of payout when it all hits the fan - which it is and it will.
Stay safe...