Fed plotting how to achieve infinite money

[gwynedd1]

Re: Fed plotting how to achieve infinite money

The US could definitely cause deflation if it wanted. All it would take is a serious dose of reverse repos and high interest rates. There is enough residual dollar demand out there that a reduction in dollar supply would make the exchange value of the dollar go up against goods and services.

Of course, there is no rational reason for the US to do this. What seems almost preordained is dollar devaluation, as you point out, to reduce the huge debt burden. What is truly hilarious is the deflation heads who think the US can't reduce the value of its currency no matter what.

Hi Joy,

There is no rational reason for the US to do this and that is one in the same with the public interest. If the public interest is not being served by our government, I must assume it has been privatized to serve a particular interest. Monetizing debt has allowed the bankers to widen their market and perpetually. The current contraction and Fed bailout is narrowing the competition. This follows a particular well documented pattern.

The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.
-Wealth of Nations

As to the value of the classical money here are the restrictions.

Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labour bestowed in procuring them, and the value of the capital employed in the mines which produce them.
-Ricardo

None of those apply to the dollar. Thus the scarcity of the dollars is of their complete manufacture. That there is no reason for the US to do this assumes the US public has not seen its government seized by the interests of a particular cartel that operates against the interest of the public.