Tuesday, September 27, 2011
And then there was $500 bln more
On Thursday, the government’s checkbook increased by $500 billion. Just like that.
Where did it come from?
Was a tax levied on people and businesses in that amount?
Did they find it laying around in some gov’t warehouse?
Did we dig it up out of the ground? Perhaps a quantity of gold in that amount?
It came from nowhere. We just said, we now have $500 billion more.
That’s it. By decree, which is exactly where all fiat money comes from.
And that’s where all fiat debt comes from, too.
And fiat debt is paid with fiat money so there is no debt per se, or at least not in the sense that most people imagine.
Is it inflationary?
No. Just ask gold traders who bought on that belief. Or forex traders who’ve been selling the dollar on that belief.
That $500 bln allows the government to keep writing the checks.
And it’s all about who writes the check.