"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:john-B646DC.17144121122007[at]sn-radius.vsrv-sjc.supernews.net...

- quote -

The *real* reason it all actually works is that Uncle Sam
requires that we pay taxes in FRN's (Federal Reserve Notes
that we all know as the "dollar").

As far as you and me? We're free to accept whatever payment
we agree to (including dollars if we so choose) in any
private transaction we want. I'll trade you a dozen
chickens for that there pig. Would you trade me an ounce
of silver for that 5th of vodka?

We could, theoretically, do AOK with privately issued
currencies. The "Liberty Dollar" folks seemed to be making
some progress toward that end before they were recently shut
down by Uncle Sam.

Sure, it's convenient that we're all on a "dollar" exchange,
but it ain't necessary.

It *is* necessary to pay the IRS in dollars, and I'm pretty
sure that's the reason why we all use 'em, whether we know
it or not.

In article
<dfdce74f-5c8f-476b-ab38-c62053f1af6a[at]d21g2000prf.googlegroups.com> ,
pallav <pallavgupta[at]gmail.com> wrote:

- quote -

Money doesn't have to be backed up by a hard asset. Money works
because we all agree that it has a particular value, and because
it is in limited supply. In fact, in the US, there is a law that
says that money has to be accepted as legal tender. The system
works because we all use money to get paid for our labor and to
buy the stuff we need. As long as money is hard to counterfeit,
it will keep its value.

Money also behaves according to the rules of supply and demand.
If the feds dump in a few billion dollars, that is such a small
amount compared to the vast total of all dollars out there that
it doesn't impact the supply in a material way. But if the
government starts the printing presses in high gear, and dumps
20% or 30% of the current money supply into circulation, or
people lose faith in the system (especially in the government),
then the money system can rapidly break down. The big effect
is inflation, which can get going so fast that it becomes
hyperinflation. There have been cases where people needed
wads and wads of cash to buy just the simple basics, such as
in Germany after WWI.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
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pallav <pallavgupta[at]gmail.com> writes:

- quote -

It comes from the FRB buying Treasuries in the open market.
Likewise, when the FRB wants to reduce the money supply, it
sells Treasuries in the open market.

--
Rich Carreiro rlc-news[at]rlcarr.com

When the Feds start injecting cash ($20 billion here, another $20
billion there etc), where is all this money coming from? In the long
term, does this money even have any value? How can you just print
money left and right without valuing it to something (say for instance
a hard asset like gold)?

Or are the Feds just loaning out today hoping the future generations
will pay up for it? I don't understand how they can just loan out
billons of dollars every week and now. Where can I read about this?

Thanks for any information.