moonbat1775

Understanding Government Debt: The Treasury's Indispensable Role

I must add some corrections to a scheme for equity backed monies before I retire to lick my wounds. Turns out I neglected that bank reserves must absorb 1/2 of growth
to keep pace with the growth in money backing to maintain the 100% reserve requirement. This might limit growth in the money value to 1/2 of what I previously stated.

My apologies for my "irrational exuberance".
The idea has promise nonetheless. Time will tell.


Corrected calculations for an equity backed money and banking model:

money appreciation rate = average productivity growth per savings per year (P) * ratio of savings to total money supply (SR)

Average productivity growth per savings (P) = 5%
ratio of savings (SR) = 1/5
growth rate = 1% per year This is 1/2 the US historical average. Money doubles in value in 70 years for a 20% savings rate. This seems slow but it is a conservative figure.

100% savings model (theoretical maximum growth rate)
Average productivity growth per savings(P) = 5%
ratio of savings (SR) = 1.0
growth rate = 5.0% Money doubles in value every 15 years assuming new savers/savings replace lent out Money.

Jars of clay
can carry the truth
and sometimes, maybe,
even cracked-pots;
but sometimes sadly,
it seems they cannot.

mb

Understanding Government Debt: The Treasury's Indispensable Role

""However if there is more base money in the system than meets their needs or wishes AS A WHOLE, the only way the excess can be eliminated and earn a return is when some buy Treasury securities. " the author via Smarty

The key question is "buy Treasuries from WHOM"? If from the Fed, then the money is sterilized since what does the counterfeiter-in-chief need with money? But if from the Treasury then it goes to the government which will just spend it.

Understanding Government Debt: The Treasury's Indispensable Role

Here that link to "The New Money Model" (recently revised):

members.cox.net/moonba...

Understanding Government Debt: The Treasury's Indispensable Role

Smarty,
Cracked-pot or no, i can do some math and here are some results of growth rates for the banking and money model I've been working on:

growth rate = average productivity growth per savings (P) * ratio of savings to total money supply (SR) * 2

Average productivity growth per savings (P) = 5%
ratio of savings (SR) = 1/5
growth rate = 2% per year This matches the US historical average. Money doubles in value in 35 years for a 20% savings rate. This will be the steady state model after the Monies have prevailed over fiat.

100% savings model (theoretical maximum growth rate)
Average productivity growth per savings(P) = 5%
ratio of savings (SR) = 1.0
growth rate = 10.0% Money doubles in value every 7.5 years assuming new savers/savings replace lent out Money. This is the model that will consume fiat for good.

For any interested: The New Money Model

Understanding Government Debt: The Treasury's Indispensable Role

"MB, I hope you have recovered from whatever loco inducing substance got you going on my 1000 comment. I had absolutely no idea what you were ramblin' on about. There is nothing to forgive. " Smarty

You're the best and perceptive too. And along those lines:

Jars of clay
can carry the truth.
And sometimes maybe,
even cracked-pots
but sometimes sadly
it seems they cannot.

I'm sorry I rained on your 1000 comment parade. Your rash friend will be more careful in the future. May the Boss make it up to you.

mb

Understanding Government Debt: The Treasury's Indispensable Role

" Thus it's only interest earning alternative is to buy Treasury securities." The Author to Smarty

Yep, roped by a government-backed money and banking cartel (GBMBC) into buying government debt. How convenient!

Understanding Government Debt: The Treasury's Indispensable Role

dedicated to those vexed by unrighteousness.


Concerning the fiat masters and their friends

They now are the insiders
but soon they'll be looking in
to a system they're too poor for
and even Gold will turn on them.
Gold has an honest daughter
and also brilliant, you will see.
And she'll pick her friends most carefully,
for the rest, obscurity.

Let the cynical disbelieve, they will serve their purpose too.

Understanding Government Debt: The Treasury's Indispensable Role

This came to me on a Sunday walk

ForwaRd and Backward;
booms and busts.
The poor are oppressed
for the sake of fear/lust.

ForwaRd and Backward;
is there no other way?
It turns out there is
(and the looters shall pay) .

ForwaRd and Backward;
you soon must die.
Your crimes stink to Heaven
and hence a Reply.