Posted on 08/05/2014 12:01:29 PM PDT by mgist
“In fact, “institutional capital”, i.e., that under the control of financial elites, from all over the world, invests in our government debt.”
The Treasury sells its debt at auction to anyone who wants to buy it. Insurance companies and pension funds are among the largest purchasers of government debt. If you own Savings Bonds you are an owner of government debt.
“It does not create its own money, it borrows it at interest.”
Except for the U.S. Mint and the Bureau of Printing and Engraving you would have a point. All coinage is government created money. The United States Notes first printed in 1861 are an example of government created money. They were issued as a separate series as late as 1976.
“it borrows it at interest”
The only money that the government borrows at interest is the amount that it spends in excess of tax receipts.
“If you look at PGalt’s post, you can see the mechanisms of control.”
What PGalt posted is an editorial polemic by one of Thomas Jefferson’s supporters. It’s an attack on Hamilton and the funded public debt that was enacted when Hamilton was Sec. of the Treasury. But it was the innovation of the funded public debt that saved the American government’s finances from the state of collapse it was suffering under during the Articles of Confederation government. The Hamiltonian system had the effect of taking the ‘not worth a Continental’ dollar and making that dollar as good as gold. Jefferson had many virtues but an insight into sound finance wasn’t one of them.
“If government did not borrow from elite finance, elite finance would not be a master of government dictating terms and conditions.”
It borrows from anybody who ponies up their cash.
“Since government does borrow, the lender sets terms and conditions, “
The market sets the conditions. That’s how auction markets work.
“With governments it quickly erodes into a loan shark type situation, since those same financial elites have filled the upper echelons of diplomacy and espionage all around the world with their people. If a country decides to not pay, it’s quite easy to influence other governments to go to war to force them to pay, as much of the assets of the largest businesses, retirement funds, sovereign wealth funds, high net worth individuals, etc., will be adversely affected by the bond default.”
Conspiracy nonsense that sounds like a movie plot.
How depressing.
Thanks.
We really need a “do over” back to about 1910.
#40 for links later read
This is not going to end well.
you can get a pdf of The Creature From Jekyll Island here:
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