jldavid47 wrote:vincecate wrote:xakzen wrote:
The money being destroyed has already been destroyed in the 50-500 trillions, but remains on the books of these Too Big To Fail (TBTF) firms. There is hopefully no political will to print that much money after Nov.
I don't believe you should count all debt, let alone notional value of options, as money.
In which case you are an idiot. Of course, all debt is money.
In what economic theory do all debts and notional value of options count as money? In this wikipedia article showing a table of all the definitions of money wikipedia users know about it does not show any that include either "all debt" nor anything like "notional value of derivatives". Do you know of any real economist who thinks that all debts and notional value of derivatives count as money?
http://en.wikipedia.org/wiki/Money_supply
jldavid47 wrote:
You can't get rolling bubbles in tech stocks, real, estate and commodities without massive debt leveraging which purchased those assets.
I agree that an asset bubble needs an infusion of money. Clearly the Fed was injecting money into the economy to make these bubbles. However, that does not mean that "stocks" or "real estate" or "commodities" or "debt" or "notional value of derivatives" are money. Also, I don't think a bond bubble, which we have now, needs massive debt leveraging to happen, just an infusion of money (say Fed buying up a trillion or two in bonds).
Again, Japan is the exception. If you look at 100 other cases of hyperinflation things happen much faster. Nobody else lasted as long as Japan has with such high debt and deficits before getting hyperinflation.
Notional value is not a real thing. Imagine I sell you an interest rate swap where I will pay you 1% interest on $1 million dollars US and you pay me 1% interest on $767,000 Euro for the next 3 years. I might sell you this for just $10,000 yet the "notional value" is $1 million US. Do you really think the notional value counts as money?
http://en.wikipedia.org/wiki/Notional_value