US budget defecit $1 TRILLION - where does this money come from?
 

So this year the US defecit will be over $1 Trillion. That does not include Obamas new £700 Billion recovery effort, so it will really be nearly $2 Trillion.

Where is the US government getting all this money from, who is lending it to them?

They will borrow the cash from other countries???

Gordan - hes got deep pockets ;)

Japan, china.. and when their willingness to lend runs out the just print $$$ willy nilly:D

Listen.







































If you're lucky, you can hear the Fed's printing presses hard at work.

:D

No one.. it is made up LITERALLY..

Man borrows x amount from bank, signs form, bank sees this as "Man owes us x amount".
Bank then calls this x amount hard cash...
Bank is then ALSO allowed to make up money in a ratio of 9:1 against this already non existent money !!!!!

Look up a video on google videos about "Fractional reserve banking"

You will be like this :eek2: :eek2: :eek2: :eek2: :eek2: for a week

Go make a cup of coffee, sit down and watch this for 45 mins...

Money As Debt

As far as I know it's pretty much that the US will offer bonds to other countries with a return, so countries like China lend them money (or rather, they 'invest' their money in US bonds), but the US are just spending and spending so god knows how they'll ever pay this back - probably never. The US is truely screwed, and this may be more than just a deep recession/depression and be the downfall of countries like the US. When it becomes clear they won't be paying this money back, no countries will be lending and then what happens...

i,ve heard a couple of amazing facts about the dollar

60% of it exists outside the US -- in russia china etc

and 20% of the physical notes are forged

but then again 81% of statistics are made up

I'm confused, Fuzz.

Bank lends man hard money and records it as debt they are owed. They can't call that hard cash - it isn't, it's debt.

Separately, bank has depositors putting money into their accounts. It's not theirs but they are allowed to lend out a large proportion of it (not a fixed 90% - differs depending on the instritution, scale, capital adequacy etc).

Fractional reserve banking is, in essence, what allows banks to operate - i.e. if they had to keep all of their depositors cash in reserve just in case it's called upon, they wouldn't have anything to lend to others. By being allowed to keep only a small part in reserve - for customers to get back on demand, the balance provides the liquidity to make the system work.

i.e. yes, the cash does really exist - it's not made up or created.

They can lend ON the debt...

Watch the video..

That's a very good video and quite shocking. I didn't realise it worked quite like that.

Steve

Its a long one, but a perspective from the emerging economies is interesting. Don't be put off by the accent

Global Imbalance - An imminent Dollar Crisis

Excellent video deep, glad I stayed up to watch that.
Certainly enlightening and I can see he has his head screwed on correctly!
Some parts were a little difficult to understand mind :D
Cant you lot learn to speak slower :o

Here's one for bed time reading...

The Real Story - Economic Collapse by Design


I need some kip now!

The world's finacial system is based on a 300+ year old system of interest bearing debt that was introduced by...The Bank of England. It's flawed, and recent events prove the system is wrong.

It's designed to keep the elite where they are and the rest of us supporting it.

Its all that chilli mate, it fires us up! I'll watch yours later:)