Banking 12:  Treasuries (government debt)

Banking 12: Treasuries (government debt)

Introduction to supervision debt as well as treasuries. What it equates to when you contend which Federal Reserve Notes have been released by a Reserve bank though have been an requisite of a Government.


25 Responses to 'Banking 12: Treasuries (government debt)'

  1. personova - January 10th, 2010 at 6:54 pm

    Sal, the revenue base dynamics of the US no longer support the debt owed. You cannot tax indefinitely. We have reached a Laffer effect, such that any marked increase in taxation will not increase revenue, in fact it may even reduce revenue. The ability to pay, the confidence in US Treasuries, is not good as gold, and really the US credit rating should be Junk. Especially, in maintenance of wealth.

  2. 7wiiskate - January 10th, 2010 at 6:54 pm

    the info is great. bit i would have like it better if he had done it in a regular blackboard with chalk so that it could be more easily understood and looked at. just my opinion. tnx 4 the upload

  3. Pantz104 - January 10th, 2010 at 6:54 pm

    I have a question. If you loan the government X amount of dollars (bank notes) and they fulfill their promise to re-pay you with interest, would you not still end up losing out? Although it would appear you now have more dollars than you loaned out, the purchasing power of those dollars has deceased due to inflation over the many years.

  4. Evulmeh - January 10th, 2010 at 6:54 pm

    I find it interesting that there are so many people against FED etc. on the internet, yet the views on these videos are now about 6,000…

    Wondering if those ppl are just not willing to learn more :P

  5. Evulmeh - January 10th, 2010 at 6:54 pm

    The law? :P

  6. hansxxxx666 - January 10th, 2010 at 6:54 pm

    sure!

  7. blumyztikk - January 10th, 2010 at 6:54 pm

    yes thanks, i’m just really interested in those things..it’s good to ask isn’t it?

  8. hansxxxx666 - January 10th, 2010 at 6:54 pm

    no!

  9. hansxxxx666 - January 10th, 2010 at 6:54 pm

    They are independent as an institution.
    But of course they are responsible for building trust in the US economy.
    If they would act criminal, they lose the world’s trust, the dollar would be worthless, and the economy would be destroyed.

    Comprende? ;)

  10. blahdelablah - January 10th, 2010 at 6:54 pm

    @draggeddownthehole
    So, just to clarify, the treasuries are the government’s way of loaning money from the central bank? The treasuries become a promise to pay back more than is printed by the bank (with the extra coming through taxes)?

  11. GGGlitzzzzz - January 10th, 2010 at 6:54 pm

    Sorry for posting, but well I hope to be lucky with MY angel)
    i don’t usually believe in chain comments, but this one is pretty cool. u don’t need to do it, but when u read it, u might smile. :)
    There are 20 angels in this world
    10 are sleeping
    9 are playing
    1 is reading this

  12. joshborne - January 10th, 2010 at 6:54 pm

    Yes!

  13. blumyztikk - January 10th, 2010 at 6:54 pm

    fed is the most powerful institution in your country because it controls reserves, i have question. to who fed is responsible for…are they above everything?

  14. draggeddownthehole - January 10th, 2010 at 6:54 pm

    I live in Canada. How I understand it, the government prints a bunch of paper called Treasury bonds (a sort of security) in exchange of canadian dollars (CAD or bank notes). Those dollars are then used to pay public workers. The dollars were created out of nothing by the banks (probably owned by english bankers) and the Govt pays interest on the treasuries, which are a form of loan. So the bank notes are backed by Treasuries.

  15. jackuy12345 - January 10th, 2010 at 6:54 pm

    thx dude i really learn a lot of information about bank from, keep them up sir!!!!

  16. nietzsco - January 10th, 2010 at 6:54 pm

    I understand the principle of ‘Treasuries’ , but as a non US citizen I’m not entirely aware of the context in which they work. How does the US government choose who it borrows money off? And are the ‘Treasuries’ literally bits of paper that you just keep until the government gives you your money back or somebody else buys the treasury off of you?

    I’m sure i’ve fundamentally misunderstood something but I’d appriciate help from any Americans who can help me.

  17. FranceParisian - January 10th, 2010 at 6:54 pm

    alas

  18. ananiasacts - January 10th, 2010 at 6:54 pm

    They don’t. The currency mostly sits around in vaults because people use checks instead. The point is that for every note the bank has they are allowed to loan out two.

  19. jdcremin - January 10th, 2010 at 6:54 pm

    I was considering many loan cycles during the fractional lending money multiplier – it is capped at a reserve ratio of perhaps 10%. $50 can multiply to $500 at that reserve ratio – through multiple lending of a lessening portion of the $50.

  20. gwynedd1 - January 10th, 2010 at 6:54 pm

    The formula works like 100/.5 thus only 200 can be created. However that is the maximum. You are only taking into account one loan deposit cycle. The initial loan is $50 which will likely be a deposit of $50 which can become a $25 loan etc.

  21. chor1962 - January 10th, 2010 at 6:54 pm

    Hi All
    Have a question, if all the national banks use a common currency issued by the Central bank and the resereve ratio is 50% i would like to know where do the national banks get the remaining 50%currency from to give loan to customers, because the Central bank is going to give these national banks money only proportionate to the gold reserves they deposite with the central banks?

  22. jdcremin - January 10th, 2010 at 6:54 pm

    Thanks – I finally came to that conclusion after much thouhgt. It seems that the loaning out of 90 of a 100 deposit still holds but after the multiplier effect it increases and is capped at the 10% reserve ratio which you explained. If the banks ever decide to loan out these billions that they’ve recently aquired -look out.

  23. dpod916 - January 10th, 2010 at 6:54 pm

    which really shows how risky our banks can be to our financial system since we have a 10 percent reserve ratio the federal reserve then only has to keep 10 percent so while a normal bank can loan out 10 times its reserves threw this method you could loan out 100 times the actual wealth drastically increasing the money supply which causes inflation

  24. dpod916 - January 10th, 2010 at 6:54 pm

    if you have to keep 50% if your demand accts on reserve and you have 100 gold pieces then by keeping that 100 gold pieces on reserve you could loan out 200 gold pieces because 100 is 50 percent of 200

  25. jdcremin - January 10th, 2010 at 6:54 pm

    Wait – I think I’m confusing fractional reserve lending with reserve ratio.
    Let me watch the videos again.


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