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DropInIn

How are bonds repaid?

From extant currency.

What do the funds used to buy bonds do until repaid?

They back the newly printed currency.

You see, nothing is ever actually created.

Money is created from Commodities like wheat, corn, and metals, all of which are obtained in manners where the input cost is less than the output value with the additional value coming from a process in nature (sun and photosynthesis, or geologic actions for example).

You've clearly never actually done the flow chart, huh?

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You're talking about wealth, not money. Wealth indeed cannot be created out of thin air and is based on converting inputs into higher value outputs. Money in contrast can be created at will, and is, all the time.

Again NO.

The money used for the bond is Taken Out Of Circulation and then new cash is printed.

The money already exists.

The value already exists.

It simply doesn't exist as Cash.

Theres a difference.

Really, do the effing flow chart.

Aren't you talking about bond issuance? Yes, no money is printed then. It's printed when the central bank buys the bond back from the open market using new money.

>How are bonds repaid?

They aren't, the central bank indefinitely rolls them over.

What flow chart are you referring to?

> They aren't, the central bank indefinitely rolls them over

Wow, that's purely disingenuous

Investors are absolutely paid back. Why do you think people buy them?

Really, given that and every other response so far I'm afraid Poe's Law is now in play.

You're a troll until proven otherwise.

No, bonds held by the federal reserve are rolled over. The debt is paid back but it is immediately replaced with new debt of equivalent value, off of the open market. The process is described here: https://www.newyorkfed.org/markets/treasury-rollover-faq

>On the auction settlement date, the maturing Treasury securities are exchanged for the newly issued Treasury securities.

In net, the debt is only paid back when the central bank is actively reducing its treasury holdings, by rolling over less than the total amount of maturing debt. That is basically the reverse process of 'printing money', it takes the money back out of the wider economy.

>Why do you think people buy them?

Certainly 'people' buy them because they intend to get paid back, yes, but the central bank doesn't have the same motives. It increases and decreases the amount of treasuries it holds in order to control the money supply. That's the whole purpose of it holding treasuries.

edit: here's some bedtime reading https://theconversation.com/how-the-federal-reserve-literall...

The level of disingenuous is absurd at this point.

Do investors get paid in exchange for returning the bonds?

Yes.

The fact that the government repeats the process is irrelevant to the simple fact that the Cash printed is done so by first securing an equal amount of funds to back them which is then returned with interest to the bond holder, inherently meaning that the Cash is not printed out of nothing but rather printed explicitly to represent real world value.

The amount of wealth in circulation and the amount of cash in circulation are not equal.

Wealth is constantly changing as new commodities and services are produced which create new wealth "out of nothing". You're engaged ina complete misattribution of cause and effect

At this point it seems intentionally deceptive...

Poe's law is in effect and I will begin treating you as a troll until proven otherwise.

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