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How much do the governments "spend money into creation"? The way its happening is through greater national debt

This is a political decision, not an unalterable fact about the monetary system. Sovereigns have dated liabilities to their own citizens because it suits their political needs, not because they have to issue bonds, nor even because they have to honour bonds previously issued. That's the whole point of being sovereign.

It can suit their political need because it exchanges liquid legal tender for rather less liquid sovereign bonds. Or it can suit their political needs because they have made the political decision to run the economy as if they were operating under a Gold Standard. The former can be smart or can be dumb. The latter is always insane.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Oct 9th, 2010 at 09:16:00 AM EST
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