No one can match the intensity of US printing.
If most country printed as much as the US, even as a proportion of GDP, they would have hyper inflation.
The US gets away with it because the dollar is a world currency.
They can print more and still get imported goods from their paper. They don’t need to increase their own production.
Why don’t you also print your money today and also buy treasury bonds?
When you people keep shouting that the U.S GOVERNMENT not U.S COUNTRY but U.S GOVERNMENT is $21 trillion in debt where do you think that figure comes from?
That $21 trillion is the money owed by the U.S government not the whole country in general. Very important point. The U.S government owes $21 trillion.
The U.S government does not borrow direct loans… since time immemorial, they print treasuries. And the govt. then proceeds to borrow from itself, from the people and even from foreigners by selling to them treasuries.
Like in that video above the government has borrowed from itself by selling Treasury Bills to the Federal Reserve!
And they govt. will have to repay @Kennedy Maina , the books must balance!
It is not free money. The Federal Reserve makes profits and every year they give those profits to the Federal govt. Part of those profits will be used to cancel that debt that that man is talking about in that video.
The U.S government has never failed to repay tbills in over 300 years of existence!
After the treasuries mature you can claim your principle plus interest from the government.
The people who survived the 1929 wallstreet crash were those who had invested in Treasury bonds. The govt. repaid their principle plus or minus the interest. Those who had invested money on wall street or stoted their money in the banks, they lost everything!
So a government Treasury Bill is a more secure form of investment more than even keeping your money in the bank.
A bank can collapse but the government cannot collapse.
A whole economy may collapse but the government cannot collapse entirely. And they will repay your bond even if it’s at huge loss to your initial principle. The government HAS to pay.
That is why U.S Treasury Bonds are highly secure investments. The only problems is that they are slow yielding. The returns on investment are low and slow. You are better off putting your money on wall street or some other investments where the returns are much higher and much quicker but the risk of losing your money is also higher.
Because the U.S economy is quite solid and the government has always repaid the Treasury bills that is why a country like China or Japan or Saudi Arabia store a vast amount of money in U.S treasury bills. After their bills mature instead of withdrawing them they usually just purchase another extension on the treasury bill or bond they are holding onto.
The government has to repay that money. And I told you they repay that money via a variety of ways. For instance the Federal Reserve makes profits on behalf of government. Those profits made by the Federal Reserve will cancel that debt.
The Federal Reserve meanwhile can also sell their govt. treasuries to a third party and get back their money. It is an economy designed to keep money in circulation.
The Kenya government routinely sells treasuries but Kenyans don’t like investing in stocks or bonds or government bills.
A Kenyan prefers to build a rental apartment than to buy government bonds.
But they do exist ndio hizi hapa :
That consortium of private banks calling itself ‘The Federal Reserve’ prints money. Not the US government.
They will always print more to ensure their interests are met and the banking system holds.
The government pays tbills because they keep printing more money. An investor will not differentiate newly printed money from thin air used to pay them from old money, or money created by actually enlarging the GDP and the nation’s production.
You are in for a rude shock if you think the ever ballooning US debt will ever be paid off.
They will print more and include it as debt in perpetuity.
100% of Kenya’s treasury bills are oversubscribed.
The US government repays by printing even more money (taking even more debt). That’ why it goes up every year.
Also, the fed reserve making a profit is a self-defeating argument. Because the are making a profit from mostly money they printed from thin air.
You think that man heads the Fed for being stupid?
Hehe. It’s a concept that would take you time to understand. The U.S economy is a fast economy. The Kenya economy is slow.
In Kenya people are conservative, they don’t like to risk that is why the government is always broke because people are seating on their money. Kenyans buy land which they never sell. Kenyans are not risk takers. Even our stock exchange is very slow most Kenyans don’t even know it exists.
The U.S is designed for you to gamble your money, don’t hold on to your money. People buy debt in colossal amounts including credit card debt. The U.S economy asks you, why live without a car yet you can get it on credit?
Americans invest in everything. From purchasing government treasury bills and bonds to investing in Apple or a new drug. So the volume of cash in circulation is massive. That is a concept you need to grasp.
And FYI most of the dollars ever printed are often outside the U.S not inside the U.S because of the amount of external trade Americans engage in.
And now you are starting to get the point.
None of your statements denies the fact that the US prints vast amounts of money from thin air, with no proportional growth in the country’s production.
If Kenya did that, there would be much more money chasing the same amount of goods. Hence hyper inflation.
But the fact that the US dollar is accepted everywhere means the US don’t have to produce more goods. They just need to print more money and buy the goods from China and around the world.
This goodwill extended to them will not last forever and their bluff will be called one day.
Just like it was called in the 60s when France and other countries demanded to exchange their dollar reserves for gold.
I think you missed the point or the point missed you.
Yes you are right but it is still a very slow economy. Who are these Kenyans who purchased those treasury bonds? It is mainly politicians, billionaires… generally the well connected and wealthy folks.
That part of the economy is not open to the ordinary Wanjiku.
In the U.S you will find kawaida waitresses buying stocks because the economy is vibrant and open to everyone. And they advertise like crazy so everyone is often aware that stocks and treasuries exist!
The ordinary locals are informed on how to participate in the debt market.
If Safaricom floats an IPO who buys most of that stock? It’s akina Uhuru not Wanjiku. Wanjiku is often locked out. If you want a bull market you must open up the market to Wanjiku.
Debt does not necessarily breed hyperinflation because the economy is moving.
When the economy is stagnant that’s when you get inflation. In Kenya most citizens are often jobless or hustling so the amount of money in circulation is very low. Those are scared investors. There’s no bull market.
In a fair open economy like the U.S or Singapore when ordinary people have money in their pockets they buy debt in form of bonds or stocks. They have options. They don’t want to keep money in the bank or in speculating on worthless land in Nanyuki or Kitengela. They want to double their money on the stock exchange or buy stock in Apple inc.
And the U.S economy operates such that you don’t have to save for 50 years to own a house, own the house now lipa pole pole but we will guarantee you that you will always have employment. Keep the money moving, in fact buy some treasury bonds we are building a new road.
He is thinking from a Kenyan perspective. He does not understand that in some open economies even the govt. is a mere participant because the market is so hot.
When you live in a country where private companies like Amazon or Apple are floating IPOs worth trillions of dollars even the govt. gets thirsty and wants to participate in this party.
In Kenya how many kawaida citizens can rise from poverty like Bezos or Gates did and have money that rivals the govt.? Akina Uhunye hawawezi itikia ufike hapo. Look at what they are doing to the Keroche lady because she is growing too big too fast and competing with their interests. They chop her legs off immediately.
For instance can you in Kenya today start a milk processing factory that can grow and even surpass brookside and you even end up purchasing brookside itself? Is that feasible without some serious political clout?
Can you start your own brewery in Kenya today and even end up purchasing EABL outright?
Can you start your own power company and one day purchase KPLC?
It’s not possible. The Kenyan economy is not open nor liberal. That is why @Kennedy Maina you find it hard to comprehend how U.S debt works. Who will pay? How will they pay? Where will such money come from? How can a central bank make money?
A bull market is essentially linked to a liberal, open democracy.
SME is the largest segment in the US, employing most Americans.
The same as Kenya.
Starting large companies is the exception not the rule in the US, as it is in Kenya.
Every Kenyan business owner has dreams of growing his business to become a mega corporation but the minute you invest in a Kenyan business whereby you will compete with a powerful Kenyan you are finished.
And I’m not saying that the U.S does not have hostile competitors but the government is a referee. In Kenya the government is owned by the competitor it is not a referee.
And this is why countries become rich or poor.
Lee Kwan Yew of Singapore decided to let his government to be a free and fair referee and not get involved in businesses or destroying others.
Jomo Kenyatta chose the opposite. He was the president as well as the country’s top businessman. He killed Kenya that day.
Note that both countries are the same age but one of them became a super power.
Kuguru had dreams of growing Softa soda to become like Coca Cola and employ thousands of Kenyans. That dream was murdered in its infancy by politicians and powerful families with interests in Coca Cola. There is no liberal fair market practice.
S.K Macharia had a dream to become the timber and paper king of Africa. Moi would hear none of it. Today he is just getting by as a TV broadcaster. S.K Macharia would probably be richest man in Africa but his ambition was thwarted by a politician with interests in the paper and timber industries. So S.K Macharia had no choice but to go into an industry where politicians are not too keen to remove him again.
And now look at what they are doing to the Keroche lady.
That is why you cannot comprehend how the U.S economy operates. Their central bank is actually run independently like a private bank.
Basically the chairman of their Federal Reserve is giving the country a loan and he can choose to refuse and there’s nothing Trump can do about it. That chairman is also incharge of how that bank makes profits. He is not under duress.
You wise one with your brilliance, have you even headed a cattle dip committee before throwing shade?
He is used to leaders like Sugoi and Gathecha.
Watu wanapewa billions za Covid halafu zina dissapear into thin air overnight. With no explanation.
Instead of selling treasury bonds to ordinary Kenyans they go out and float a Eurobond in the U.S. where kawaida citizens buy bonds regularly.
He also does not understand that a government can generate cash flows without borrowing direct loans from foreign governments.