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Thread: Does This argument make sense.

  1. #1

    Does This argument make sense.

    Many people on twitter have this argument it goes like this?

    "The federal reserve note known as the “petro dollar” is will become less valuable due to printing money.
    However it does open up room for other currencies to take over, such as the treasury note.
    BTW the national debt is in fed notes."

    "For example, if the value of the federal reserve note tanks and it takes 22 trillion to buy one acre of land the US national debt is gone and since we no longer need foreign oil the petro dollar is obsolete. Win win'

    "When we went off of the gold standard to a fiat currency(debt based system), we knew inflation would would eventually collapse the fiat system.
    It is the natural progression of a system not based on sound money."

    I keep hearing this argument from Trump Supporters.



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  3. #2
    The Federal Reserve Note, or FRN, is known as the petrodollar. Its value is determined by supply and demand, like everything else in this world (water is cheap, but not in the desert). Its supply is determined by the half dozen huge banks that own the Fed. Demand is determined by many things. The two biggest things are the legal tender laws that make it fiat money (the federal law that makes using it legal and almost mandatory) and the fact that it has become the "petrodollar".

    The term petrodollar refers to the fact that anyone who buys lots of oil internationally uses dollars to do it. The reason for that is simple. You, as a taxpayer, send the military to any country that sells oil for other things to kick their dog asses. This creates a demand for dollars, as anyone who needs oil has to buy dollars before they can buy oil. This allows those banks to print more dollars without creating too much inflation.

    Inflation, by the way, looks like prices going up. But it isn't, really. It's the value of the dollar going down. And if you're paid in dollars, your pay is worth less as a result.

    They just printed lots of dollars, and as soon as this silly lockdown is over, "prices will skyrocket" (your pay will become almost worthless).

    Yes, the federal debt is in FRNs, and yes, if the FRN becomes worthless, so will your mama's savings bonds, leaving her out in the cold.

    Fiat currency doesn't have to become worthless. Japan's holds its value pretty well. But if you're a politician how do you resist the temptation to borrow?

    Quote Originally Posted by Will Rogers
    The budget is a mythical beanbag.
    Congress votes mythical beans in, then tries to pull real beans out.
    It's odd you got all this good information from Trump supporters, since people who know what's going on should be able to see how Trump is screwing things up.
    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

    'Well, you can get no more liberty than you give.'--Will Rogers

  4. #3
    Changing currency to treasury notes and puff the debt is gone makes no sense.

  5. #4
    The trumpkin YangBangers trust in the Helicopter bux.

    Quote Originally Posted by Swordsmyth View Post
    You only show up to attack Trump when he is wrong
    Make America the Land of the Free & the Home of the Brave again

  6. #5
    Quote Originally Posted by Swordsmyth View Post
    You only show up to attack Trump when he is wrong
    Make America the Land of the Free & the Home of the Brave again

  7. #6
    "For example, if the value of the federal reserve note tanks and it takes 22 trillion to buy one acre of land the US national debt is gone and since we no longer need foreign oil the petro dollar is obsolete. Win win' So the entire debt would be gone. How does that even happen?
    Last edited by CORRY20; 05-24-2020 at 03:39 PM.

  8. #7
    If you create twenty-two trillion FRNs by typing on a computer, which is the way they're created, then use them to pay off all the bondholders, then there are no more outstanding bonds. There are also so many former bondholders flush with cash and looking to make other investments that FRNs will come to seem as common and undesirable as tree leaves.

    How we get weaned of foreign oil is as simple: We lock down and destroy our own economy.

    Sounds simple enough, right? Actually, it's not.

    Now, FRNs are actually based on something. They're based on debt. Each dollar bill in your pocket is, in essence, a junk bond (look it up--that really is what you get for your labor). So, there has to be some outstanding loan to "back up" each dollar. So, the only way there's enough debt-based "dollars" to pay off the federal government's debt is if the Fed monetizes lots of different kinds of debt. They'd have to use mortgages and credit card debt and everything under the sun. These are the FRN's "solid foundation". The question is, is there enough debt in the world to create enough currency to pay the debt?

    At the end of the day, we don't know how the imminent crash will work itself out. Anyone who thinks they do is full of hubris. But we do know this much: We may not know exactly how a house of cards will fall, but we know it will fall. And the current crop of elites will turn their grants and kickbacks into something if real worth and cart it off to Dubai or wherever.
    Last edited by acptulsa; 05-24-2020 at 05:15 PM.
    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

    'Well, you can get no more liberty than you give.'--Will Rogers

  9. #8
    This has to be one of the most bizarre argument I have ever heard. "For example, if the value of the federal reserve note tanks and it takes 22 trillion to buy one acre of land the US national debt is gone and since we no longer need foreign oil the petro dollar is obsolete." Win win' So the entire debt would be gone.



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