, 21 tweets, 159 min read Read on Twitter
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog The national govt imposes an obligation (tax) denominated in the unit of account ($/£), then also declares the thing (money) that it will accept to cancel the obligation, and then issues a credit (money) denominated in the unit of account. 4/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog The force of tax drives the private sector to offer up goods/services to the govt in order to obtain the credit to satisfy the tax obligation. The govt then denominates the goods/services in the unit of account ($/£) – meaning, it prices them. 5/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog Next, the govt issues a credit to the sellers denominated in the unit of account ($/£) by entering a bank acct and simply adjusts the numbers in the account upward: For example, 1,000 becomes 3,000. Money in individual bank accounts is “bank money”. 6/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog Next, the central bank enters the commercial bank’s reserve account and adjusts the numbers in those accounts upward. These credits are central bank liabilities denominated in the govt’s unit of account ($/£) and are govt money which settle payments. 7/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog When govt taxes, bank money is deleted from the individual account, and THEN CB liabilities (govt money) in the bank’s reserve account are deleted settling the tax obligation. Treasury’s spending account at the CB is credited. 8/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog In the US case we will note that NOTHING contained in treasury’s spending account counts toward the stock of money in the economy until treasury spends. Taxation deletes bank reserves (govt money) from the entire banking system, and so, from the stock of ‘money’. 9/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog On this correct view, we see clearly that taxation by the national government destroys CB liabilities, and, thus, it is NOT revenue for the national government. Full stop. End of story. So, then, this leads us to the ridiculous talk about “printing money”. 10/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog There is absolutely no such thing as ‘printing money to fund national government spending’. It does not exist. This argument begins on the errant premise that there is a commodity or currency peg to the currency in question. 11/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog “Printing money to fund spending” means that the govt increases the level of its own currency in circulation beyond what the supply of the thing pegged to its currency can handle at the fixed exchange rate. There is no currency peg or fixed exchange rate in the US, UK, Oz. 12/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog Printed cash is issued to meet bank customer demand, not to ‘fund national govt spending’. US case for example: Bank reserves are deleted and the CB ships the equivalent number in the form of cash to the bank to be held in its vaults. 14/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog Secondly, there is no possible way for a sovereign currency-issuing govt to find itself unable to sell its bonds as long as they are denominated in the govt’s unit of account. Again, US case, there are “Primary Dealers” whose job it is to create markets for the bonds. 15/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog As to tsy bonds themselves, the ultimate point is that they serve no financing function. They are not fiscal policy. Bonds are issued to conduct monetary policy. Govt issues them to defend a particular interest rate target. 17/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog Unfortunately, the orthodoxy and those driven by ideology, wish to believe that barter is how economies began and money arose from barter, independent of an authority or govt, as a medium of exchange. This is pure nonsense. 18/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog There is absolutely ZERO historical evidence of the barter-based fantasy, and there is ZERO historical evidence that money is a medium of exchange that arose out of barter to make it efficient. 19/?
@TIMGOLDFINCH @Will6And7Ric @PatriciaNPino @DianeJamesMEP @Devo_Too @widespreadhaze @FawkeEU @Ezquid @jbhearn @Petercookwahook @PDWriter @katiecannon2 @SerbanVCEnache @sarahollando552 @ProfSteveKeen @BobbySizzler @Gravity_v20 @netbacker @J_MoAGoGo @HetdoxEconomics @consbyname @DeficitOwls @paulallchorne @ProfessorWerner @OzMyHomeMAC @OnlyindreamsFCO @homoaequalitas @Seanski_McG @tonywestonuk @scientificecon @MenudoTyBucket @nmf77 @Jorge_Econopata @yungneocon @Hugorelly @akoster @sdgrumbine @jryancollins @billy_blog The $/£ are govt-issued social tools; credits denominated in $/£ that offset debts also denominated in $/£. The central bank is the entity that keeps track of the credits offsetting debts, which is the main activity of a thing called, ‘The Market’. 21/21
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