US Debt Clock (M2 supply is now decreasing, dollar to gold/silver/oil ratios at $0)

US Debt Clock ^ | 1/28/23 | US Debt Clock

[C210N]

Changes are afoot in the financial system. Here are some data points:

Dollar to gold, silver and oil ratios are now pegging at $0. They all have since sometime yesterday, 1/27/23.

M2 Money Supply is decreasing.

Calls To Mint Trillion-Dollar Coin Resurface As Government Faces Debt Crunch

[Dave Wright]

Actually, from your answer you understand my point precisely. We are under no obligation to pay back the shares of the Federal government that we hold. As long as they don’t float so many shares that it drives down the value of the dollar against other world currencies and causes inflation, there is no limit to the size of the float.

People who are fortunate enough to hold more shares than they need to balance their budget needs can park their excess shares by buying Treasuries issued by the government. The government pays them the fixed interest rate of the bond when issued set by the Fed and the purchaser’s yield depends on the price they paid in the public market. The interest rate set by the Fed is completely arbitrary and just expresses their internal policy to manage the money supply. They could set it to zero at any time because its just a policy decision. The Fed can create whatever cash the Treasury needs to pay whatever interest rate they want.

If you could print as much money as you needed, why would you care if people paid you back?

[cymbeline]

“The Fed creates and deposits dollars into the dealer bank accounts...”

Thank you for that informative post. Money, debt, money creation at high levels is mysterious to me.

You’re saying the Fed deposit, not loans, money to “dealer bank accounts” (what are they?), so they “can bid” on Treasury bonds.

Are the dealer banks required to bid, meaning it would be “must bid” rather than “can bid”?

Let’s say a dealer bank buys Treasury bonds. Then the created money goes right back to the Fed, correct?

What’s the point is these maneuvers. Why doesn’t the Treasury or Fed just lend the money to the dealer banks?

You speak of borrowing from the Fed as indicating basically that the borrowing bank is untrustworthy.

What, then, is accomplished by the Fed starting a process with “depositing dollars into a possibly untrustworthy dealer bank”?