[Pops]

And that work is paid for with debt-based fiat money borrowed at interest. Do you deny that?

The medium of exchange makes no difference.
I could pay the interest with work, singing, edifying oratory (at a discount)

[vtsnowedin]

And when that purchaser buys that product he uses debt-based money that was borrowed at interest to do so.

You assume that nobody has any assets , cash, income or savings that they might use to buy something. That is just not the case. The availability of credit does accelerate the economy but without it cash is king and life goes on.
Really have you had to borrow every dollar you ever spent?

[MonteQuest]

And that work is paid for with debt-based fiat money borrowed at interest. Do you deny that?

The medium of exchange makes no difference.
I could pay the interest with work, singing, edifying oratory (at a discount)

LOL! Sing for your supper. Not how the world works, Pops!

Money is the principle of a loan. If you are debt free and you have a $100 in your wallet, somebody has a loan out on it or it wouldn't exist. It's part of the principle of a past loan. There is no debt free fiat money one can use to purchase products or pay for the value of work.

[Pops]

I've said this several times...The economy post peak will be shrinking, so the money supply should shrink too. It will do that automatically as loans are either paid off or defaulted.

But you never answer how that money supply won't shrink to zero. Especially since there is more debt than the money supply.

I've answered it over and over.
Loans will be retired if/when the economy shrinks.
The corresponding deposits will simultaneously disappear.
If there is no profit whatsoever to be had and so no loans to make then bank balances will shrink to cash/reserves on one side and equity on the other.
I think that will be a long way off but at that point switching everything over to the equity-money deal would be OK because the economy will be really slow.

The idea isn't earth shattering. You just do not accept the difference between inside/outside money. One an asset and one a net zero.

Really, when I read about inside/outside lots of things became clearer to me.
.

[vtsnowedin]

edifying oratory (at a discount)

[MonteQuest]

You assume that nobody has any assets , cash, income or savings that they might use to buy something. That is just not the case.

No, never said that.

Really have you had to borrow every dollar you ever spent?

No, but somebody did or the dollar wouldn't exist. I just used part of the principle from his loan to buy stuff.

[MonteQuest]

Loans will be retired if/when the economy shrinks.
The corresponding deposits will simultaneously disappear.
If there is no profit whatsoever to be had and so no loans to make then bank balances will shrink to cash/reserves on one side and equity on the other.

Reserves are not part of the money supply. When you retire the loans, you retire the wealth. One person's loan is another's asset.

Still looking for an answer to my question: If all money is debt, and debt defaults and repayments destroy the money created, what prevents the money supply from going to zero when all debt defaults and/or all debts are paid?

[MonteQuest]

I have no idea what you two guys have been going on about. It is too technical for me. However, given what little I know about money creation (it happens when debts are created and disappears when debts are paid or defaulted on) then it stands to reason that money (the money supply?) can go to zero if there are no more loans made. Does Pops really disagree, or does he just like to irritate you Monte?

Not sure. Too many of his responses are word salads. But ..he may be jerking my chain. Either that, or he doesn't have a grasp of how this all works, or he is convinced he does.

[Pops]

There is no debt free fiat money

I just posted a fairly good link explaining that fiat money is exactly that.

Don't know if you missed that or just blew it off.

If you don't accept the difference between commercial bank money and central bank money there is no use me arguing with an unbacked opinion.
Wouldn't matter how many links I put up.

[Pops]

I have no idea what you two guys have been going on about. It is too technical for me. However, given what little I know about money creation (it happens when debts are created and disappears when debts are paid or defaulted on) then it stands to reason that money (the money supply?) can go to zero if there are no more loans made. Does Pops really disagree, or does he just like to irritate you Monte?

For about the 10th time...

FRNs are not based on debt – they are backed by the government and that makes them a net asset in your pocket.

How could the people with the printing press run out of money?

LoL

I'm going to the couch, read those links about inside/outside money
Here is a good un:
http://papers.ssrn.com/sol3/papers.cfm? ... id=1905625

[MonteQuest]

If you don't accept the difference between commercial bank money and central bank money there is no use me arguing with an unbacked opinion.
Wouldn't matter how many links I put up.

Didn't need to read it. I know the difference. I told you as much when I said bank reserves are not part of the money supply. To use your terms, "inside" money is the money supply. "Outside" money is bank reserves or deposits held on reserve at Federal Reserve banks, and are not part of the money supply.

Still looking for an answer to my question: If all "inside" money is debt, and debt defaults and repayments destroy the "inside" money created, what prevents the "inside" money supply from going to zero when all debt defaults and/or all debts are paid?

[MonteQuest]

How could the people with the printing press run out of money?

Because the Bureau of Engraving and Printing doesn't create the money supply. The banks do, through loans.

The Federal Reserve Banks have tons of physical dollars in their vaults, so there is no shortage of physical dollars. But those dollars have no value until they are loaned into the money supply by the banks or are stolen into circulation.

Weimar Germany tried using the printing press. The inflation reached its peak by November 1923 but ended when a new currency (the Rentenmark) was introduced. In order to make way for the new currency, banks "turned the marks over to junk dealers by the ton to be recycled as paper.

That's how "the people with the printing press run out of money." It becomes worthless.

[vtsnowedin]

Loans will be retired if/when the economy shrinks.
The corresponding deposits will simultaneously disappear.
If there is no profit whatsoever to be had and so no loans to make then bank balances will shrink to cash/reserves on one side and equity on the other.

Reserves are not part of the money supply. When you retire the loans, you retire the wealth. One person's loan is another's asset.

Still looking for an answer to my question: If all money is debt, and debt defaults and repayments destroy the money created, what prevents the money supply from going to zero when all debt defaults and/or all debts are paid?

You are not listening !! All money "IS NOT DEBT. Get it? Your premise is false.

[Quinny]

I have a balance in my account that I can draw out as cash or pay using debit cards. There is no distinction between the 1's & 0's that are debt based and those that were 'earned' it is all just £'s & €'s.

The premise is not false Money = Debt read the links to the Bank of England papers.

[MonteQuest]

You are not listening !! All money "IS NOT DEBT. Get it? Your premise is false.

I am afraid you are the one who is not listening. All fiat money is loaned into existence as debt.

Google it. You will not find a link to support your position.

[MonteQuest]

The premise is not false Money = Debt read the links to the Bank of England papers.

Cliff notes:

As explained in ‘Money in the modern economy: an introduction’, broad money is a measure of the total amount of money held by households and companies in the economy. Broad money is made up of bank deposits — which are essentially IOUs from commercial banks to households and companies — and currency — mostly IOUs from the central bank.(4)(5) Of the two types of broad money, bank deposits make up the vast majority — 97% of the amount currently in circulation.(6) And in the modern economy, those bank deposits are mostly created by commercial banks themselves.

Saving does not by itself increase the deposits or ‘funds available’ for banks to lend. Indeed, viewing banks simply as intermediaries ignores the fact that, in reality in the modern economy, commercial banks are
the creators of deposit money. This article explains how, rather than banks lending out deposits that are placed with them, the act of lending creates deposits — the reverse of the sequence typically described in textbooks.

Commercial banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created. For this reason, some economists have referred to bank deposits as ‘fountain pen money’, created at the stroke of bankers’ pens when they approve loans. A related misconception is that banks can lend out their reserves. Reserves can only be lent between banks, since consumers do not have access to reserves accounts at the Bank of England.—Bank of England

Bank of England

This is true of all fiat currencies in the world, including the US. All "money supply" is created as debt through a loan.

The FED also creates money through liquidity swaps such as QE where they exchange reserves for assets like bonds. But this new money is not part of the "money supply". It is reserves that can only be lent between banks. What Pops calls "outside" money.

The 3% of money in circulation that is not debt-based is coinage, so there is a teeny tiny kernel of truth that all money is not debt. But all FRN's are debt-based.

[MonteQuest]

They refuse to understand the system that supports them. They are like fish that can not see the ocean.

Most people don't have a grasp of the system. I wonder how the masses would react if they did?

Most people think they are borrowing their neighbor's savings when they get a loan.

[JV153]

Weimar Germany tried using the printing press. The inflation reached its peak by November 1923 but ended when a new currency (the Rentenmark) was introduced. In order to make way for the new currency, banks "turned the marks over to junk dealers by the ton to be recycled as paper.

That's how "the people with the printing press run out of money." It becomes worthless.

I don't know.. are glitzy trinkets like diamonds paid for with thousands of dollars, or yen, or Euros, etc. also worthless ? The company you're referring to that ran the printing presses in Germany in 1923 is called Giesecke and Devrient (G & D), founded in 1852 . They make securities and banknote paper, checks, certificates, passports, smart cards, identification systems and e-payments.