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Author Topic: Where does the money come from?  (Read 2004 times)

aestus57

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Where does the money come from?
« on: September 10, 2009, 10:29:39 AM »

 {:-{

Just thinking about the economic troubles we're in at the moment, I was wondering where all the money comes from that the government needs to borrow over the coming years. Who do they borrow it from and who is rich enough to lend it out. Are we all being conned into future tax rises etc just to keep us down????? After all it just seems to be electronic numbers being moved around between bank accounts.  Is there a finite amount of money in the world or is there some grand magician out there who pulls a few billion out of a hat when its needed??

I get more confused the longer I think about it, can anyone enlighten me in the simplest of terms?

 {:-{  {:-{  {:-{
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Shipmate60

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Re: Where does the money come from?
« Reply #1 on: September 10, 2009, 11:44:04 AM »

Most of it is raised as Government Bonds.
These are a good investment as the interest is guaranteed.

Bob
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RickF

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Re: Where does the money come from?
« Reply #2 on: September 10, 2009, 11:55:09 AM »

So the Government sell "Bonds" to raise money they need but haven't got, promising to pay back more than they borrow? Where do they get the money to pay the interest? Borrow it, of course.

I believe the Icelandic Government Bonds are particularly sort after!

Rick
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Shipmate60

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Re: Where does the money come from?
« Reply #3 on: September 10, 2009, 12:53:00 PM »

The interest is funded through Taxes. That is the only way the Govt can raise its own money.
The problem arises when many Govts offer Bonds.
This pushes up the interest rate which makes it more expensive.

All Government Borrowing has to be paid for in Taxes, that is how the Banks were bailed out.

Bob
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malcolmfrary

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Re: Where does the money come from?
« Reply #4 on: September 10, 2009, 03:42:36 PM »

The more important question is where did it go to?  I would be all in favour of getting it back in cash or kind.
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polaris

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Re: Where does the money come from?
« Reply #5 on: September 10, 2009, 07:15:57 PM »


Dear All,

Do not forget the current philosophy of printing money. Many Govts. are persuing this course at the moment.

The World Bank is another source. Many Govts. pay into this to keep a strategic reserve beyond their National Bank - the Bank of England in our case - and there is also the EU as well obviously (into which GB pays the apx. amount of 40M per week).

The price of gold is 'significant' at the moment, so whatever any Govt. stocks held of this commodity, their currency is balanced to a certain degree - depending on what funds have been pumped into their economies of course (& we don't know what 'Our Gordon' has done with ours!). Why the present gold price is such as it is, is due to 'significant investors/& others', moving out of 'certain things' and buying gold, but, the art is in this instance is going to be when it's the best time to start off-loading it! Ok, right, we are talking about transactions in tons of the stuff, not just ounces here and there, but the World Mkt.
'watchdogs' will take precautions to ensure that the boat is not rocked by undue heavy selling - it's to no-ones advantage after all...

So, in great brief, this is what's going on.

Regards, Bernard
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dreadnought72

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Re: Where does the money come from?
« Reply #6 on: September 10, 2009, 11:25:36 PM »

Aestus,

The simplest way to get to the bottom of this is to think what money is.

Money was invented to extend the bartering system: "I'll give you these tokens for your labour, in order to allow you to exchange them for any products from others at any date you fancy."

This works fine, until you consider who's producing the tokens: the government print them on paper or stamp them as metal discs. They construct them, and expect us to value the tokens.

All is fine, of course, until an apocalypse of one sort or another, when we realise that the notes are just paper, and thererfore basically worthless; and the coins, being base metals, are similarly so. (Who promises to pay the bearer one pound, and of what?!?!)

In the current crisis, it's to the government's advantage to print/stamp more to increase the amount in circulation and to be able to lend to those who need it, and thereby allow more trade and to keep the economy going - but obviously not to produce so many that other countries realise that the inherent value of our tokens has decreased against theirs. That way lies inflation and hyperinflation, and - if the evidence of history is to be taken for granted - more authoritarian governments.

To help avoid this, you can move some of the "value" lying behind this money from its current value (housing stock, labour, production, etc.) towards future value (what we might expect to be "worth" as a country in the near/long term). This future value is supplied by International Banks, and is effectively a loan from them which will need to be repaid. Since the International Banks are aware of the basic worthlessness of money, it's up to US, as workers & producers, to provide this real value, to be paid as cash (they trust) in terms of future higher taxes, investment, control of our economy, etc.

That said, treat all the above with suspicion, for I am a communist who sees the real output of organised labour as the only thing of value. ;-)

Andy, whistling the Internationale
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Greggy1964

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Re: Where does the money come from?
« Reply #7 on: September 10, 2009, 11:44:30 PM »

Any one notice what happens when 'copper' coins are left out to weather?

They rust??

iron is cheaper than copper

coppers used to be made of copper

another way to debase the value of money

what are they going to do when jo public gets so apathetic that no-one votes?
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Shipmate60

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Re: Where does the money come from?
« Reply #8 on: September 11, 2009, 01:49:55 AM »

1 vote will win. Simples

Bob
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Wasyl

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Re: Where does the money come from?
« Reply #9 on: September 11, 2009, 09:45:09 AM »

Where does money come from?
well, i can tell you where mine,s come,s from,it come,s from the safest place i know,and that,s "from under my mattress"
why?may you ask,well, the simple fact is,when i put it there, i knew how much there was,then 1 year later i checked it and the amount i put there,was still there,Unlike what happened two years ago,when i deposited a tidy sum with the bank, and was assured by said bank that my investment was safe,"guaranteed they said"yet less than 8 months later my "guaranteed "amount was 3048 less than when i put it in,
Then when i went to the bank to tell them I was closing all my accounts,and wanted the money in cash,suffice to say, it took me longer to get it out,than it did to put it in,and i had to show my passport,driving licence 2 forms of I.D.with my address on it,numerous security questions,then there was the questions, about what i intended to do with the money,what was it for,etc etc,
"Banks never again"

Wullie
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das boot

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Re: Where does the money come from?
« Reply #10 on: September 11, 2009, 09:48:18 AM »

{:-{

Just thinking about the economic troubles we're in at the moment, I was wondering where all the money comes from that the government needs to borrow over the coming years. Who do they borrow it from and who is rich enough to lend it out. Are we all being conned into future tax rises etc just to keep us down????? After all it just seems to be electronic numbers being moved around between bank accounts.  Is there a finite amount of money in the world or is there some grand magician out there who pulls a few billion out of a hat when its needed??

I get more confused the longer I think about it, can anyone enlighten me in the simplest of terms?

 {:-{  {:-{  {:-{



Best answer to your problem? Don't think about it....   %)


Rich
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bogstandard

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Re: Where does the money come from?
« Reply #11 on: September 11, 2009, 10:09:37 AM »

Here is a monetary question. Think about it, and try to come up with an answer. You will then realise how money raises cash for the government.

From the time it is minted, to the time it is destroyed, how much tax will be paid on a single one pound coin.

Almost every transaction throughout it's life, when it changes hands, or is paid out or transferred, it is taxed.


Bogs
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Wasyl

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Re: Where does the money come from?
« Reply #12 on: September 11, 2009, 01:29:07 PM »

Very little Tax,if its under my Mattress {-)

Wullie
but i can see what you mean,its like VAT, on a new commercial vehicle,Vat when new,trade in to garage Vat again,then it can change hands for a dozen times and each time Vat can be applied if its sold between Vat registered people,
The same applies to second/hand car parts,Vat when new,then car is scrapped then parts are sold + vat,then we have our pensions, money in is taxed,money out is taxed,
under my mattress taxed once, {-)

Wullie
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BlazingPenguin

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Re: Where does the money come from?
« Reply #13 on: September 25, 2009, 09:33:34 PM »

Pour a cuppa and have a look at this series of videos....
http://www.youtube.com/watch?v=vVkFb26u9g8
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