Comments on: What Backs the Buck? http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 18:29:42 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Bernanke, Ron Paul eller Ellen Brown? Valet borde vara l http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-237709 Bernanke, Ron Paul eller Ellen Brown? Valet borde vara l Fri, 27 Nov 2009 23:15:56 +0000 http://www.ritholtz.com/blog/?p=42946#comment-237709 [...] Källa: http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/ [...] [...] Källa: http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/ [...]

]]> By: JP Koning http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-231784 JP Koning Tue, 03 Nov 2009 20:42:06 +0000 http://www.ritholtz.com/blog/?p=42946#comment-231784 You got it. Although a lot of government backing is made up of real assets: land, buildings, roads, and infrastrucuture. Stuff that people would pay to use even if there was no government monopoly backed by force. You got it.

Although a lot of government backing is made up of real assets: land, buildings, roads, and infrastrucuture. Stuff that people would pay to use even if there was no government monopoly backed by force.

]]> By: zebov http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-231768 zebov Tue, 03 Nov 2009 19:26:01 +0000 http://www.ritholtz.com/blog/?p=42946#comment-231768 So it's more that the dollar is backed by the collateral for the loans, not the loans themselves. Before the great collapse, the chart shows the dollar backed by government bonds. So in the end, the dollar is backed by the U.S. government's power to steal real property from the people--or if that's too extreme of wording, to tax the people and force them to pay these taxes under threat of confinement or death, and if you can't pay they will take your real assets. Now in addition to that, a large portion is backed by MBS's or loans out to banks that have crap as collateral. Which means these new dollars are mostly worthless, unless the FED can show us there is some real quality collateral on those loans (which there isn't or else they wouldn't be hiding it). Well THAT's depressing. So it’s more that the dollar is backed by the collateral for the loans, not the loans themselves. Before the great collapse, the chart shows the dollar backed by government bonds. So in the end, the dollar is backed by the U.S. government’s power to steal real property from the people–or if that’s too extreme of wording, to tax the people and force them to pay these taxes under threat of confinement or death, and if you can’t pay they will take your real assets. Now in addition to that, a large portion is backed by MBS’s or loans out to banks that have crap as collateral. Which means these new dollars are mostly worthless, unless the FED can show us there is some real quality collateral on those loans (which there isn’t or else they wouldn’t be hiding it). Well THAT’s depressing.

]]> By: JP Koning http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-231653 JP Koning Tue, 03 Nov 2009 13:38:43 +0000 http://www.ritholtz.com/blog/?p=42946#comment-231653 Zebov, It's true that currency is backed by bonds, and bonds are promises to pay currency. Where is the real asset backing currency then? Well it helps to remember that a bond indentures specifies that bond holders have a claim on a firm's real assets. Should the firm be unable to pay interest on the bonds, the bondholders can make good on this claim. Thus, when all the chips are down, money is backed by bonds, and bonds are backed by real assets. Cheers! Zebov,
It’s true that currency is backed by bonds, and bonds are promises to pay currency. Where is the real asset backing currency then? Well it helps to remember that a bond indentures specifies that bond holders have a claim on a firm’s real assets. Should the firm be unable to pay interest on the bonds, the bondholders can make good on this claim. Thus, when all the chips are down, money is backed by bonds, and bonds are backed by real assets. Cheers!

]]> By: DiggidyDan http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-231552 DiggidyDan Tue, 03 Nov 2009 00:45:39 +0000 http://www.ritholtz.com/blog/?p=42946#comment-231552 The full faith and credit of the United States Government. . . or maybe China. I'm not sure any more. I would note that I have a couple of Hanky Panky's autographs in my wallet. The full faith and credit of the United States Government. . . or maybe China. I’m not sure any more. I would note that I have a couple of Hanky Panky’s autographs in my wallet.

]]> By: CNBC Sucks http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-231540 CNBC Sucks Mon, 02 Nov 2009 23:56:23 +0000 http://www.ritholtz.com/blog/?p=42946#comment-231540 Jeff, I was thinking you just about wet your pants when Andy picked Brees and The_Patriot_Way picked Brady right before you. I knew you would not be a dolt so I was prepared to take Fitzgerald with the 8th pick. I never expected Chris Johnson's health would last until Week 8 as an every-down NFL running back. The steal of the draft was Andy's with Ray Rice in the EIGHTH ROUND though. Andy missed on Slaton (second round), but made up for it with Rice. Jeff, I was thinking you just about wet your pants when Andy picked Brees and The_Patriot_Way picked Brady right before you. I knew you would not be a dolt so I was prepared to take Fitzgerald with the 8th pick. I never expected Chris Johnson’s health would last until Week 8 as an every-down NFL running back.

The steal of the draft was Andy’s with Ray Rice in the EIGHTH ROUND though. Andy missed on Slaton (second round), but made up for it with Rice.

]]> By: Mannwich http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-231528 Mannwich Mon, 02 Nov 2009 23:05:36 +0000 http://www.ritholtz.com/blog/?p=42946#comment-231528 @CNBCS: Now you know why I refused to trade MJD to you for your offer (which was basically for a bag of dirty jockstraps). The Jags will run him to death even if they are getting killed, which means he racks up huge points every single week. That was the steal of the draft at the #7 pick. @CNBCS: Now you know why I refused to trade MJD to you for your offer (which was basically for a bag of dirty jockstraps). The Jags will run him to death even if they are getting killed, which means he racks up huge points every single week. That was the steal of the draft at the #7 pick.

]]> By: CNBC Sucks http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-231522 CNBC Sucks Mon, 02 Nov 2009 22:57:51 +0000 http://www.ritholtz.com/blog/?p=42946#comment-231522 @ The Curmudgeon Hey Mudge, hope things are well with you. You were away for a while. I used your global wage arbitrage argument for a few rants over the summer. Mannwich told me the reason, so hopefully things are fine. Unfortunately, I will have to settle for the single-shot, made-in-China 12-gauge from Wal-Mart, because the Libertarians bought all the good American .30-06s already. @ Ben I just sent you an email thanking you for that quick and thoughtful response. Why the heck were the Jaguars running MJD when they were behind? This is a dark, DARK day for The Great CNBC Sucks. I have to proclaim the Proudhon to my Marx, Mark E. Hoffer, the winner of the FedRes debate. Thanks for nothing, Koning. The Libertarians won today on the Ritholtz blog. Widows and orphans weep on the street (not sure which street). But there is always...tomorrow! @ The Curmudgeon

Hey Mudge, hope things are well with you. You were away for a while. I used your global wage arbitrage argument for a few rants over the summer. Mannwich told me the reason, so hopefully things are fine. Unfortunately, I will have to settle for the single-shot, made-in-China 12-gauge from Wal-Mart, because the Libertarians bought all the good American .30-06s already.

@ Ben

I just sent you an email thanking you for that quick and thoughtful response. Why the heck were the Jaguars running MJD when they were behind?

This is a dark, DARK day for The Great CNBC Sucks. I have to proclaim the Proudhon to my Marx, Mark E. Hoffer, the winner of the FedRes debate. Thanks for nothing, Koning.

The Libertarians won today on the Ritholtz blog. Widows and orphans weep on the street (not sure which street). But there is always…tomorrow!

]]> By: Mannwich http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-231521 Mannwich Mon, 02 Nov 2009 22:51:12 +0000 http://www.ritholtz.com/blog/?p=42946#comment-231521 I honestly believe that what backs the dollar is really what backs everything else right now - - our collective ability as human beings to delude ourselves. It's "extend & pretend" on hyper-macro scale. If (when?) that ends, watch out. Hopefully I'm long gone by then. I honestly believe that what backs the dollar is really what backs everything else right now – - our collective ability as human beings to delude ourselves. It’s “extend & pretend” on hyper-macro scale. If (when?) that ends, watch out. Hopefully I’m long gone by then.

]]> By: Mannwich http://www.ritholtz.com/blog/2009/11/what-backs-the-buck/comment-page-2/#comment-231519 Mannwich Mon, 02 Nov 2009 22:49:11 +0000 http://www.ritholtz.com/blog/?p=42946#comment-231519 @batmando: What that tells me is far too many people of that generation have either thrown in the towel and/or feel powerless amidst the complexity of the situation (or as my father-in-law reminds me - he can barely get anything done on a local level and he's VERY ACTIVE, how's he supposed to influenced federal policy?), so they're just hoping for the best (and hopefully preparing for the worst). I fear that not enough are doing the latter. Too much "hoping" and not enough preparing. @batmando: What that tells me is far too many people of that generation have either thrown in the towel and/or feel powerless amidst the complexity of the situation (or as my father-in-law reminds me – he can barely get anything done on a local level and he’s VERY ACTIVE, how’s he supposed to influenced federal policy?), so they’re just hoping for the best (and hopefully preparing for the worst). I fear that not enough are doing the latter. Too much “hoping” and not enough preparing.

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