MONEY PRINTING 101: Banks Print Money To FUND The Deficit
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- Опубликовано: 25 авг 2024
- In this episode, Nik delivers a full explainer on Treasury money printing and the monetization of T-bills by banks. In another follow up episode to the recent series on Michael Howell's liquidity framework, we walk through examples of how the Treasury creates money when it borrows and spend, and compare that to the primary dealer financing of Treasuries via repo investments from money market funds (MMFs).
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Thanks Nik for breaking down these complex issues to help us better understand our FIAT central planner monetary system.
The Bitcoin Layer, cool video keep up the amazing content
Such a complicated system but so nicely explained. Looking forward to hearing more about Shadow Banking
This is perfect. The only way I could think to make it better would be to create an interactive set of general ledgers to make the transaction order more clear. Your explanations were great.
There is an error in the second slide. The commercial bank should receive reserves to match the new deposit when the Treasury sends the money to the hospital.
@@edwardnilges1675 One can argue it is still money printing because the reserves were not spendable into the economy whereas the new deposit is chasing goods and services. M2 has expanded due to the actions of the Treasury and the commercial bank.
@@edwardnilges1675Bank reserves haven't been reduced since the bank ends up with t-bill + reserves. The Treasury spending money borrowed from a commercial bank into the economy can only result in a new deposit (aka money printing).
Think this way - hospital opens a checking account with Wells and when Treasury sends hospital the payment, hospital's checking account with Wells get credited (deposit) and the commercial bank receives a reserve funded by TGA account from Fed?
…and people say bitcoin is complicated 🤦♂️🤦♀️🙈🤦
Thanks Nik, keep em coming 😊
Thanks for breaking this incredibly complex system down for us, it took me 3 runs to get 50% of it 😅
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Happy 4th! Any chance of a daily recap of market🙏🏽
many thanks bro!!!! GOODJOB!
Thank u Sir🤓🤑
Thanks Nik, can you do a session to discuss about BRICS and the potential impact of devaluation of USD?
are you reading along at thebitcoinlayer.com/subscribe? we are covering this quite often, including my latest thebitcoinlayer.substack.com/p/the-dollar-endgame
Good video. Thank you for explaining. In the first example you say the commercial bank buys the t bill. What are they buying that with? Bank reserve? Cash deposit? Or is it simply balance sheet expansion? Put another way what does the fed recieve after they issue the t bill to the commercial bank (you label this as tga raise)?
🎯💯
How can you, as a bank, buy a t-bill & deposit an expense, a bought t-bill, to a hospital. That seems like "double spend" to me. Both are debits. That makes nj sense.
the bank buys the t-bill, the government spends, the hospital gets a deposit (in its bank account). the bank acquires a t-bill as an asset, and offsets it with the deposit liability issued to the hospital.
Thanks! Does this work for notes and bonds too?
the mechanics work the same for a Treasury note/bond, but the mechanism by which the government borrows and spends simultaneously is more accurate to show with bills. the final slide with repo funding doesn't change if the dealer buys a bill or a note/bond, so it most "works" for the final slide between bills and notes. hope this helps, and keep your questions coming!
-Nik
Have to rewatch a few times feel like I’m not following
So glad I unfollowed George Gammon and started following Nik. It’s like a kindergartener vs a PhD