Million's, Billion's and Trillion's, Oh My !

[seapower]

I remember back in the day when a thousand dollar's was all the money in the world. When someone made it to "Millionare" status any where in the Country, you knew who he was, it made the paper (really). Now we hear about 850 Billion dollar's for a stimulas package from the incoming administration. 850 Billion, that's pretty close to a Trillion, isn't it???? Does this new age money have anything to back up it's value (like in the old day's), or is this just paper with ink on it??? I mean really, I don't understand what's going on here. These figure's just seem to keep rolling off the tongue, they don't mean anything anymore. Is it just me???
I'm not wanting to start a new bashing, or any political debate here, the election is over. I never have had a good grasp on what makes the economy work, regulation's, the stock market or anything like that. All I do know is anytime I borrowed money it was with the intention of paying it back!!! How do you pay this kind of money back, ecspecially when you don't have it in the first place (getting back to the question if there is anything of value backing up this new age money). It seems to me that this is being "made up as you go". There is absolutely nothing "sound" in what I'm hearing. I
While someone way smarter than me explain what's going on here. I may be showing my lack of education here, but please give me a crash course.Frank,SeaPower

[cravertosu]

I'm with Frank! Blows my mind. How do you borrow money to pay for money already spent that you didn't have to spend in the first place?! I guess that's what that Madoff guy did!

[marine4003]

Not a problem....just figure it like this: our children s,children s...children will work it out. Which seems to be the mentality behind the current spending..it has to be.There's no other reasonable explanation.

cash is obtainable....B.O. - " Call the bureau of printing & engraving and order another trillion"

[flatbottom]

ok I think it goes like this.....

frank deposits 1000.00 in a bank. The bank , by law can lend 90% of the 1000.00 to another customer in a loan package. That person buys a fishing reel and rod. The manufacture deposits the 900.00 in another bank or the same bank. The new deposit of 900.00 is given in a loan of 90% of its value. The 810.00 is given out in a loan worth 90% of its value. Now the 729.00 is loaned out at 90% of its value. The 656.10 is packaged in a loan to a new customer at 90% of its value. And so on and so on.

So in reality the banks are lending money they do not have. If at any time a borrower(s) default on any loan....the ponzi scheme will fall apart. Or at any time the original depositor(s) remove their deposits the ponzi scheme will fail...forcing banks to replace the defaults or cash withdrawal with their own money, another depositors money, or another loan from the fed. At this time in 2008, the fed is issuing money to banks. The process is the same for the fed explained above using banks as the example.

Try not to make this rocket science. It is very simple !!!!!

[iguana1]

Actually Flatbottom, if Frank deposits 1000 the bank can lend mroe like 2000...

[flatbottom]

you are correct iguana1 . Each year the fed must print at least the total of all interest payments payed into our monetary system in a form of new money.

Like pulling a rabbit out of a hat

So it is not Pelosi in ernest. It is how the system is designed. She just spreads it in the wrong place all the time

[seapower]

I don't want it to be rocket science!!! It should all be simple MATH and should make sense, shouldn't it??? I'd probably be able to grasp rocket science easier. Wait a minute, pack fuel in a confined area, ignite it, route the ignition gases through a small volute....., add in curvature of the earth, weight of projectile, speed,thrust, time of flight.... wait that's the principle of a rocket, right ??? How come I can't understand what is borrowed at same time is SUPPOSED to be paid back, with interest , at some point. Wait,,, I thought the interest was actually the extra money that we are supposed to be working with in the first place. You can't keep eating away at capital (what back's up the value in the first place) or you will end up with WOTHLESS PAPER with INK on IT. Like we have now. Tim's example with it's meandering's sound's pretty close to what's going on!!!
I'm either really confused or maybe it just shouldn't matter to me. The Govermental Offical's have got a handle on it and it's gonna be alright. Frank,SeaPower

[cravertosu]

It all used to bother me A LOT!! Then I realized that the gov't is just going to spend, spend, and then spend some more. I decided, I'm financially stable, I have a job that isn't affected by the economy and I have a wonderful family. I'll take care of my family and help those that I can, when I can. Other than that, they aren't worth my stress. The whole higher tax thing is really pissing me off though!! When I win the lottery, that's REALLY going to cut into my winnings! Bastards!

[seapower]

Tim, I made my mind up long ago that I'm gonna live my life as best I can under the circustances too. I know I can't change what happen's "up there" and probably couldn't do better myself anyway. But every now an again I still try and make sense out of it. It bother's me that I can't. I know "just get over it" and go fishing. Well my friend that's what I'll do tomorrow. Rockfishing out'a Rudee Inlet, me, some buddie's and the wind!!!! There that'll help thing's pull back into perspective. Life is good again!!!Frank,SeaPower

[flatbottom]

frank you are getting it. The rocket design involves a fuel. The designer of that specific rocket required a hydrogen based fuel. So, in other words, using dried seaweed as a fuel would reduce the thrust, needed to lift the rocket.

Our monetary system places debt on every dollar printed. Every dollar loaned. Every dollar invested. Every dollar saved. It is in the design.