Forwarded from Michael Kowalik
Q: Where does the Gov obtain funding for deficit spending? A: Gov deficit spending is borrowed from the money market, typically by issuing government bonds.
Q: Where does the money market obtain funds? A: Per RBA data, 97% of the M3 money supply is created by commercial banks, in the form of credit (primarily mortgages).
Q: Under what conditions are the banks able to inflate the money supply the fastest? A: low interest rates.
Q: Why doesn't the Gov just print the same volume of money that banks create, instead of collecting income taxes? A: Income tax compensates the Gov for allowing the banks (not the migrants) to tax your savings.
Q: Where does the money market obtain funds? A: Per RBA data, 97% of the M3 money supply is created by commercial banks, in the form of credit (primarily mortgages).
Q: Under what conditions are the banks able to inflate the money supply the fastest? A: low interest rates.
Q: Why doesn't the Gov just print the same volume of money that banks create, instead of collecting income taxes? A: Income tax compensates the Gov for allowing the banks (not the migrants) to tax your savings.
“Reality is that which, when you stop believing in it, doesn't go away.” Said Philip K. Dick, but this is wrong. If it doesn’t go away then you are still obviously believing in it, since you identify it as that which is not going away.