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Central Banks Providing Support


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First of apologies if this is posted in the wrong forum, therefore please move it if appropriate

However this is a quest that's been bugging me for a while now, what with all the financial turmoil that has recently erupted and the supporting roles that the Central banks have had making huge sums of money available e.g. BOE’s Special Liquidity Scheme, the FED bailouts of Fannie and Freddie & AIG, and now the announcement today that Global central banks are pumping billions of dollars of extra funds into money markets BBC New Link here.

Just where is all this money actually coming from, is it reserves that the banks hold, money that has been borrowed, or is it the creation of 'new' money?

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First of all apologies if this is posted in the wrong forum, therefore please move it if appropriate

However this is a question that's been bugging me for a while now, what with all the financial turmoil that has recently erupted and the supporting roles that the Central banks have had making huge sums of money available e.g. BOE’s Special Liquidity Scheme, the FED bailouts of Fannie and Freddie & AIG, and now the announcement today that Global central banks are pumping billions of dollars of extra funds into money markets BBC New Link here.

Just where is all this money actually coming from, is it reserves that the banks hold, money that has been borrowed, or is it the creation of 'new' money?

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First of all apologies if this is posted in the wrong forum, therefore please move it if appropriate

However this is a question that's been bugging me for a while now, what with all the financial turmoil that has recently erupted and the supporting roles that the Central banks have had making huge sums of money available e.g. BOE’s Special Liquidity Scheme, the FED bailouts of Fannie and Freddie & AIG, and now the announcement today that Global central banks are pumping billions of dollars of extra funds into money markets BBC New Link here.

Just where is all this money actually coming from, is it reserves that the banks hold, money that has been borrowed, or is it the creation of 'new' money?

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First of all apologies if this is posted in the wrong forum, therefore please move it if appropriate

However this is a question that's been bugging me for a while now, what with all the financial turmoil that has recently erupted and the supporting roles that the Central banks have had making huge sums of money available e.g. BOE’s Special Liquidity Scheme, the FED bailouts of Fannie and Freddie & AIG, and now the announcement today that Global central banks are pumping billions of dollars of extra funds into money markets BBC New Link here.

Just where is all this money actually coming from, is it reserves that the banks hold, money that has been borrowed, or is it the creation of 'new' money?

Thin air, same as all money.

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In the UK the BofE invents the money by tapping a number in on a computer keyboard. In theory "liquidity" money is created, lent against assets (with a haircut), returned some time later and then is destroyed so has no net effect on the economy. Taxpayers never have to stump it up.

It's quite amusing how much the powers-that-be contort themselves to avoid admitting they create money from nothing; anything to avoid telling the sheeple that what they have to work for the govt can create from nowhere.

The deal in the US is somewhat different. The Fed has about $1 trillion in reserve notes and when that's gone will have to go cap-in-hand to the US treasury to have some more greenbacks printed.

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In the UK the BofE invents the money by tapping a number in on a computer keyboard. In theory "liquidity" money is created, lent against assets (with a haircut), returned some time later and then is destroyed so has no net effect on the economy. Taxpayers never have to stump it up.

It's quite amusing how much the powers-that-be contort themselves to avoid admitting they create money from nothing; anything to avoid telling the sheeple that what they have to work for the govt can create from nowhere.

The deal in the US is somewhat different. The Fed has about $1 trillion in reserve notes and when that's gone will have to go cap-in-hand to the US treasury to have some more greenbacks printed.

It's already gone, Enoch.

Or so the market ticker is reporting - they are on direct hyperinflatory printing right now.

http://market-ticker.denninger.net/archive...Government.html

Edited by Injin
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First of apologies if this is posted in the wrong forum, therefore please move it if appropriate

However this is a quest that's been bugging me for a while now, what with all the financial turmoil that has recently erupted and the supporting roles that the Central banks have had making huge sums of money available e.g. BOE’s Special Liquidity Scheme, the FED bailouts of Fannie and Freddie & AIG, and now the announcement today that Global central banks are pumping billions of dollars of extra funds into money markets BBC New Link here.

Just where is all this money actually coming from, is it reserves that the banks hold, money that has been borrowed, or is it the creation of 'new' money?

They print it just like gold bugs have been saying, money supply as large the trees but gold 120,000 tons in the entire world. I have been waiting on this event since 2003 missed many a bubble be it stock or property I m lovin it now. This crunch is the event of a lifetime.

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They print the money, then sell treasury bills to drain it from the system so that on a net basis no new narrrow money is created. The process is known as sterilization.

But, in your view, is this what is happening to establish the treasuries for the SLS?

Who is buying the treasuries? Whose money is being drained?

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They print the money, then sell treasury bills to drain it from the system so that on a net basis no new narrrow money is created. The process is known as sterilization.

This is how the Americans do business. I don't think the Bank of England bothers with any of the t-bill stuff, just tappy-tap on a keyboard and it's there. Remember, all UK banks are required to have a bank account of their own at the BoE, it's no effort for the BoE to change the current balance of that a/c.

Provided they later delete the new money the economic effect is nil. It's a zero-sum game. (It could go horribly wrong if a bank defaulted and their security turned out to be worthless as well. ;) )

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This is how the Americans do business. I don't think the Bank of England bothers with any of the t-bill stuff, just tappy-tap on a keyboard and it's there. Remember, all UK banks are required to have a bank account of their own at the BoE, it's no effort for the BoE to change the current balance of that a/c.

Provided they later delete the new money the economic effect is nil. It's a zero-sum game. (It could go horribly wrong if a bank defaulted and their security turned out to be worthless as well. ;) )

so its not just tippy tappy.... its secured monetisation of an assett. voila, les livres sont balances

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so its not just tippy tappy.... its secured monetisation of an assett. voila, les livres sont balances

Yes.

The account balances but the amount of money in the world increases. :)

Loand are assets, assets are assets, promises for future assets are assets....

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Yes.

The account balances but the amount of money in the world increases. :)

Loand are assets, assets are assets, promises for future assets are assets....

depends which side of the = you are

CB loan=asset

pledge=liability

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To me, the key thread on here today.

What the hell is this money stuff, where does it come from and where does it go when it is 'lost'? I've been worried about this since I was about 8, and back then, if I asked my dad, who was something in The City, he seemed to go all embarrassed and changed the subject, like he did when I asked him where babies came from.

It still worries me today. But the only thing that makes sense is:

It's all pretend. It only exists if we choose to believe in it. A bit like the dragons in the Colour of Magic. (Un?)Fortunately, most people cant get their heads round this, and continue to believe, so it continues to exist.

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But, in your view, is this what is happening to establish the treasuries for the SLS?

Who is buying the treasuries? Whose money is being drained?

Anyone who wants to protect his investment. T-bill yields are at 0.10% right now, whcih shows that there are plenty of people who would rather keep their money safe than take a risk for a return.

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  • 441 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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