News for hackers. Stuff that matters.
Re:Debt Worldwide Hits Record $86k per Person by Someone on Sunday December 16, 2018 @03:30AM (#18692288)
”If you have a 20$ bill that means essentially that the government owes you the equivalent in value”

That was true in the days of the gold standard (https://en.wikipedia.org/wiki/Gold_standard), but nowadays, i don’t think it is true anymore.

You can’t bring your 20$ bill to the government and get goods in return whenever you want to make such an exchange.

Also, a lot of money gets created by banks, not the government (in the USA, all the money, I think. Isn’t the Fed independent?)

Re:Debt Worldwide Hits Record $86k per Person by posix_me_less on Sunday December 16, 2018 @05:15AM (#18692489)
> a lot of money gets created by banks

Interesting, how does that work? Can a bank create money to pay its own taxes? That sounds too convenient...

Re:Debt Worldwide Hits Record $86k per Person by Someone on Sunday December 16, 2018 @01:39PM (#18694402)
They could (think of it: a bank could just tell government that it has more money in the bank now, or tell another bank that they transferred an x amount to the government’s account there), but regulations forbid it and various controls work hard to prevent it.

A bank creates money when it borrows you money that isn’t fully backed by saving account(s). See https://en.m.wikipedia.org/wiki/Fractional-reserve_banking, which, a.o. says:

”Because banks hold reserves in amounts that are less than the amounts of their deposit liabilities, and because the deposit liabilities are considered money in their own right, fractional-reserve banking permits the money supply to grow beyond the amount of the underlying base money originally created by the central bank.”

The amount by which a bank can do that is regulated, and, in the end, under control of the central bank. The central bank won’t be involved in every minor fluctuation of the amount of money in circulation, though.