Real Money And Credit Money

[Panda]

Numbers on a screen…………….Credit based money far exceeds physical paper and coin real money.

There have not been the inflationary consequences (except in house prices) as a result of the creation of the credit money in the inflation of credit money, numbers on a screen etc……………….As if there would have been the same inflationary forces in creation of real momey; so with the equivalent creation of physical money other costs would and will rocket as there has been with credit money with regards to houses and there prices.

This must surely be because credit money is the spending of our future earnings, whereas creation of physical real paper and coin money has a straight forward diluting effect on the power of that money (wages and savings), in essense real money not credit fiction numbers on a screen money.

Credit issuence credit money can and has contracted, but this contraction does not affect the outstanding debt. You still owe your mortgage, the debt still needs to be paid back eventually. Reducing the rate of interest only prolongs the pain for longer.

There wont be any significant deflation in prices, there will be no costs falling as a result of contraction of credit supply, because there was not any inflation as a result of its expansion originally apart from house prices, which will fall as a result of the contraction of credit money, not real money.

But this will prove to be a very convenient excuse for the creation of real physical paper and coin money, the wiping out of governments debts, and by extension hyperinflation.

There will either be house price deflation in line with a credit contraction or there will be a rapid printing of money to wipe out debt, wreck real money, as real paper and coin money are savings and wages, and we will get inflation in everything else like energy, food, essentials except houses.

QE I feel will not devalue real money, wages and savings, only the creation of paper and coins will destroy real money. QE is just a tool to keep rates down? Unless QE money enters the real economy and starts to push up prices which pull wages, but watch the BoE push up the base rate should wages take off?

P

[scepticus]

Numbers on a screen…………….Credit based money far exceeds physical paper and coin real money.

that 'physical paper and coin' is also debt money. It just happens to be taxpayer debt rather than individual private debt.

There isn't any money and hasn't been for a very very long time.

People have been furiously pretending that there is real money (especially on this forum) but there isn't any. Gold ran out in about 1650.

[lowrentyieldmakessense(honest!)]

that 'physical paper and coin' is also debt money. It just happens to be taxpayer debt rather than individual private debt.

There isn't any money and hasn't been for a very very long time.

People have been furiously pretending that there is real money (especially on this forum) but there isn't any. Gold ran out in about 1650.

where did it go

[Bloo Loo]

where did it go

I dunno, FIAT doesnt qualify as money in that:

its widely acceptable, its numerous, you can pay your taxes with it.

sort of rules it out as money I suppose.

[non frog]

where did it go

Beer and motorbikes.

(admittedly that was just mine - not sure about everyone else's)

[scepticus]

where did it go

it ran out.

you will never be able to buy a car with microgram of gold.

[lowrentyieldmakessense(honest!)]

it ran out.

you will never be able to buy a car with microgram of gold.

if it ran out

well have to use something else