Who has all this money?

[ruffrecords]

The Covid pandemic has meant the western world is borrowing more money that ever before and gets ever deeper into debt. The numbers being bandied about are unbelievable.

What I do not understand is where is this seemingly limitless supply of money coming from. Who is it that has all this cash to lend?

Cheers

Ian

 

[cyrano]

Money is simple. Just print more.

 

[shabtek]

It might be like Hysteresis and eddy currents:
Lending money to ones self

 

[zebra50]

Most of UK borrowing is in the form of government gilts.
These are bought by big institutions like pension funds and banks.
The gilts are paid back with interest after a fixed term.
So the borrowing is from people like you and me.

 

[iomegaman]

I think the question is valid, but the deeper question it reveals is "What even IS money?"...

It's construct for calculating trade between various parties...thats about as simple as we can get.

Since its a completely made up thing we can completely change the rules about how we make it up anyway.

 

[L´Andratté]

Quite instructive graphic:
https://tinyurl.com/y63l5elz

 

[JohnRoberts]

The Covid pandemic has meant the western world is borrowing more money that ever before and gets ever deeper into debt. The numbers being bandied about are unbelievable.

What I do not understand is where is this seemingly limitless supply of money coming from. Who is it that has all this cash to lend?

Cheers

Ian

This massive liquidity generation "experiment" has been going on since the 2007/2008 debt collapse. As some (including me) have speculated this might not end well, but we still don't know because it hasn't ended yet, over a decade later.

Historically when one country prints too much money, that currency gets inflated and that nation's consumers observe lost purchasing power internationally.  Note: modern fiscal policy does not literally mean just printing money. There are other mechanisms to inject liquidity.

In this decade plus experiment central bankers around the world have all introduced liquidity into their local economies in lockstep reducing the apparent relative purchasing power change.

I am not smart enough to know how this will end and hopefully they can keep these plates spinning and avoid a monetary system crash until after I become worm food.

Remarkably the US central bankers have had trouble hitting 2% inflation target (that's another discussion, inflation means you can pay back debt with less valuable money).

Also on the subject of money the US regulators seized $1B in bitcoin that apparently belonged to the founder of the illegal silk road dark website (in jail and forfeit as illegal profits).

I am still cautious about buying bitcoin (I'm old), but one of my stock market holdings "Square" is a fin tech company that allows customers to execute transactions using bitcoin. That stock is doing well because they are in a healthy business sector. I suspect the bitcoin feature is not hurting results.

JR

 

[ruffrecords]

So where does the IMF fit into all of this?

Cheers

Ian