Sunday, October 17, 2021

The Coin's Deposit Problem — NeilW

Neil explains how banking works.

New Wayland
The Coin's Deposit Problem
NeilW

1 comment:

Joe said...

"Certainly when presented with a Trillion Dollar Coin from a clearly fiscally constrained Treasury, the Federal Reserve may wish to consider a substantial haircut to manage its risk."

Question, what's the risk to the Fed? The fed wouldn't offload the coin, that's the whole point isn't it? The Treasury mints a coin, deposits it at the fed and the fed credits the Treasury's acct. The Fed's assets go up $1T and their liabilities goes up $1T, both sides balance and as Mosler has said, the lights can be turned off and the bankers can hit the links.

The entire thing is a giant charade anyways, since a coin and a 0% interest treasury bond are indistinguishable other than the label we apply to it, the whole point is it's a game of labels.

And why platinum? Why not stamp it out of recycled beer cans to really drive the point home?