#7
Government creates money all the time. We have a Treasury Department that has been doing this since 1787. We have a Federal Reserve that has been doing this since 1913.
Look at the money supply measures (M1, M3, etc) over the last two centuries. We create coinage, bills, bank reserves, etc all the time.
The question isn't whether government can create a $1T coin and call it legal tender. Of course it can, and can do so the same way it authorizes printing of $1 bills.
The question is what would happen if government did this. Okay, let's do that armchair experiment.
Let's coin 20 $1T coins (call them 'Krugmans'). Deposit the 20 Krugmans in the Treasury.
What happens next? Well, the Treasury either tries to 'spend' them -- proffer them in the markets to pay our bills -- or tries to borrow against them -- use them for collateral.
Either way the markets will likely say no, or say yes only under the most onerous terms.
And if either works, you are increasing the money supply by a substantial amount. I think there's a term for what happens when the money supply increases relative to the goods and services available. Hmmm, what's that word again?
Create a $1T Krugman if you want. Government can do it. It just isn't wise.
Posted by: Steve White ||
01/09/2013 12:34 Comments ||
Top||
#8
It would only work if the coin weighed 18,000 tons. I say make it and hand it directly to Obama.
[An Nahar] A French court handed down an eight-year jail term on Tuesday to a Turkish-Dutch man for criminal masterminding a group that had funded the al-Qaeda-linked Islamic Movement of Uzbekistan (IMU).
The Gay Paree court also permanently banned Irfan Demirtas, 53, from La Belle France, where he had been held since shortly after his 2008 Dutch arrest on charges of financing terrorism.
Eight others enjugged Yez got nuttin' on me, coppers! Nuttin'! for belonging to the group, which had sent tens of thousands of euros to the IMU, received various sentences of up to three years in jail. A 10th co-defendant was acquitted.
Prosecutors said the La Belle France-based network sent at least 300,000 euros ($390,000) to the volatile border between Pakistain and Afghanistan, where the IMU is said to be active. They said 170,000 euros of that sum was earmarked for jihad.
Set up in the late 1990s, the IMU is listed as a terrorist group by the United States. According to the U.N., some of its leaders have held top positions in al-Qaeda.
[FRANCE24] French Budget Minister Jerome Cahuzac is under investigation for tax fraud after a media report that he had an undeclared UBS account in Geneva which he then moved to Asia, prosecutors said Tuesday.
Cahuzac, who is in charge of battling tax evasion, has denied the report by the respected Mediapart investigative website that he had an undeclared Swiss account which he then transferred to Singapore.
A court in Paris has jailed nine people for raising money for an al-Qaeda linked Uzbek militant group which is accused of numerous attacks.
Turkish-Dutch national Irfan Demirtas, the ringleader of the operation, was recieved an eight-year sentence while the others received up to three years. A tenth man was acquitted.
Demirtas was also fined 20,000 euros and banned from French territory upon completion of his sentence.
Operating in eastern France, the network managed to send 300,000 euros to Pakistan or Afghanistan. It was broken up four years ago by French, German and Dutch police.
The nine were convicted of raising funds for the Islamic Movement of Uzbekistan (IMU), which seeks to overthrow the country's president, Islam Karimov.
The court heard that Demirtas had met former IMU leader Tahir Iouldache,who was killed in 2009, on several occasions.
At the trial, defense lawyers sought to argue that the money raised had been used for humanitarian purposes.
Continued on Page 47
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[An Nahar] A French court handed down an eight-year jail term on Tuesday to a Turkish-Dutch man for 
A court in Paris has jailed nine people for raising money for an al-Qaeda linked Uzbek militant group which is accused of numerous attacks.
