China lets yuan break 7-per-dollar level for first time in over a decade

Re:China lets yuan break 7-per-dollar level for first time i... by SubiculumCode on Monday August 05, 2019 @01:09PM (#20615868)

I am unclear on a point. Federal spending goes through bonds process to provide the funds, and creates a 'debt'...i.e. the national debt, which some people are obsessed over. When a bank lends money to a private party, this money is created also, ultimately through the same bonds process, I presume? If so, do bank loans increase the 'national debt'?

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Re:China lets yuan break 7-per-dollar level for first time i... by comicjk on Monday August 05, 2019 @06:22PM (#20619757)

The national debt refers only to the debt of the federal government. Separately, statistics are also kept on the private debt within a country - in the US, that's about $27 trillion. For comparison, the US national debt is $23 trillion. People care more about the national debt because it is, in a sense, owed by everyone.

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Re:China lets yuan break 7-per-dollar level for first time i... by SubiculumCode on Monday August 05, 2019 @07:33PM (#20620409)

But does it require the same bond issuances?

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Re:China lets yuan break 7-per-dollar level for first time i... by comicjk on Monday August 05, 2019 @10:17PM (#20621469)

Nations, companies, states, towns, nonprofits, and all kinds of other groups can issue bonds, which are then bought and traded on markets in pretty much the same way. There's nothing special about being able to issue bonds - the market is regulated, but the main requirement is simply that people expect you to pay them back.

The biggest difference between bond issuers is that greater trust leads to lower interest rates and thus cheaper borrowing. For example, the US government sells bonds with lower interest rates than any company - buyers demand more return for a corporate bond, because a corporation is more likely to go bust.

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Re:China lets yuan break 7-per-dollar level for first time i... by SubiculumCode on Monday August 05, 2019 @11:13PM (#20621781)

I am asking about the whether or not thr money created by bank loan and federal fiscal spending is ultimately created through the same process at the Federal Reserve.

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Re:China lets yuan break 7-per-dollar level for first time i... by RobertoG on Tuesday August 06, 2019 @07:14AM (#20624110)

I think your confusion comes from thinking there is only one type of money.

For simplification, there are two kid of moneys, the 'government money' and the 'lending money' (my terminology).

Government money would be: cash and reserves.

Reserves come from two sources (both are the government) the Central Bank and the treasure. So, when the treasure spend in the economy is creating government money. Also, when the central bank 'give' reserves to the private banks is creating money. When the govenrment tax is destroying money and when the Central Bank retire reserves of the system is destroying money.

The 'lending money' is created by the private banks when lending, but it disappears when the money is payed back. This is a different kind of money, a less 'real' money if you want.

You can find more information in many places. For instance:

https://monetary.org/wp-content/uploads/2016/03/money-creati...

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Re:China lets yuan break 7-per-dollar level for first time i... by SubiculumCode on Tuesday August 06, 2019 @02:50PM (#20628241)

Thank you!

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