Wisdomhunting (November 30, 1999 at 12:00 am)

@Khanacademy but I thought that the US govt could definitely buy back all the treasuries by printing out more money. however, the problem could be that they had to print out more than stated on each T-note, due to the interest of the T-note. and these could only result in the decrease of value of US dollar, but I don't see how would there be no more dollars in circulation. hope someone could help me asap. (: appreciate a lot.

Wisdomhunting (November 30, 1999 at 12:00 am)

Hi I am trying my best to understand the whole system, from your official website, people said that if the US govt was to pay back all the debts US owe. then there would be NO MORE money in circulation. well, I do not really understand how. as once they had paid back the debt, money would be in the market. and market would most likely spend them or save them into the bank. so why is there concern of no money would be circulating?

zoeplankton (November 30, 1999 at 12:00 am)

you're fantastic! thanks so much!

parenteaujason (November 30, 1999 at 12:00 am)

@yrebrac I hope that makes sense. I had a tough time trying to explain that through text.

parenteaujason (November 30, 1999 at 12:00 am)

@yrebrac The only thing he did differently in this video compared to other videos is that he drew the reserves below what he previously had. If you could imagine him drawing it on top, he would've initially drawn it as a liablity, which makes you correct, but then he wouldve had to balance it out with the extra reserves. He simply skipped this step by drawing it below in on the assets side.

yrebrac (November 30, 1999 at 12:00 am)

khan, love your work, but seems to be a major error in this video around the 9 minute mark. You say that grannie deposits the proceeds of selling her treasuries into the bank thereby creating reserves for the bank. Having watching all the preceeding videos this makes no sense - deposits are a liability for the bank not an asset and do not contribute to their reserves enabling further lending.

geiuy (November 30, 1999 at 12:00 am)

@khanacademy The Fed is NOT "owned" more by the government than by its members. "The Fed is independent within government in that its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government"(wikipedia).They are not required to submit financial information and are not subject to IRS audits. Do you really believe all these bankers are philantrophists?

WilliamNaville (November 30, 1999 at 12:00 am)

''maybe they buying from alot of peoples grandmothers'' had to chuckle

MrLaymensterms (November 30, 1999 at 12:00 am)

@khanacademy I notice when you drew green box representing the funds newly printed assets. Where does this balance out on the national budget? Where is the gold, or the goods to represent that currency? It seems to me that printing money just makes money less valuable in the long run.

MrLaymensterms (November 30, 1999 at 12:00 am)

@khanacademy I notice when you drew green box representing the funds newly printed assets. Where does this balance out on the national budget? Where is the gold, or the goods to represent that currency? It seems to me that printing money just makes money less valuable in the long run.