What I want to know is, WHERE is the money coming from right now? Are they simply printing it, or in the case of electronic funds, just adding zeros to the balance? Or are they borrowing it from China or Saudi Arabia or someone? I’m afraid I don’t understand the mechanics of this cash transfusion.
In the last century before WWII Germans did this --- their citizens ended up burning the paper to keep warm......
“”Or are they borrowing it from China or Saudi Arabia or someone? “”
Geithner was asked the question today - “Where are you getting the money? Are you printing it or borrowing it?” I don’t remember who asked the question. He didn’t hesitate but said, “We are borrowing it.” The questioner asked, “Who is buying the paper?” Geithner said, “We will sell it to people who want to buy it” or some equally dumb reply.
Article this morning the Financial Times that China basically is saying “We hate you guys, you’re insolvent, but there is nothing else we can do to invest the trade imbalance in, so we’ll continue to fund you guys.”
I believe it’s selling bonds to China. That is if China wants them.