PKT message, Re: [TNF] 30-year Treasuries

Henry wrote:

> > It is cheaper for government to issue new
> > money (non-interest bearing state credit instrument) through the Fed
> > than to issue sovereign debts through the Treasury.

Comment:

On p. 4 of 'Understanding Modern Money', Randy Wray wrote, inter alia, as follows:

"We can begin with the recognition that the modern state imposes and enforces a tax liability on its citizens, and, importantly, chooses 'that which is necessary to pay taxer' (twintopt). If a state decided that it would accept only beaver pelts in payment of taxes, the population would have to organize itself to ensure that it obtained the requisite number of beaver pelts; if the tax liability were sufficiently difficult to meet, beaver pelts would carry high relative value. Of course, all modern states impose a monetary tax liability and generally accept only money in payment of taxes. Not coincidentally, all modern states require that these monetary tax payments be made in the form of the state's own currency. That currency, in turn, is nothing more than the government's liability."

The logic of Randy's view of "new money" as "the government's liability" strikes me as unassailable.

Gunnar

----- Original Message -----
From: "Gary Santos" <evs@xxxxxxxxxxxx>
To: <TheNewForum@xxxxxxxxxxxxxxx>; <pkt@xxxxxxxxxxxxxxxx>;
<a-list@xxxxxxxxxxxxxxxxxxx>
Sent: Sunday, July 20, 2003 6:41 AM
Subject: Re: [TNF] 30-year Treasuries

> "The agencies have also been hedging their interst rate exposures with
> derivatives. There is on-going investigation that will eventually reveal
> very unwelcome disclosures, the tip of the iceberg having been hinted in
> recent weeks."
> --------------------------------
> Henry,
>
> What sort of investigation? How rolled over derivatives are booked?
>
> Gary
>
>
> ----- Original Message -----
> From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
> To: <pkt@xxxxxxxxxxxxxxxx>; <a-list@xxxxxxxxxxxxxxxxxxx>;
> <TheNewForum@xxxxxxxxxxxxxxx>
> Sent: Sunday, July 20, 2003 5:54 AM
> Subject: [TNF] 30-year Treasuries
>