And they’re going after commodities and hard assets; gold happens to be one of them. Let me just ask you, what do you think of gold as an inflation hedge? Do you think these people are right, right now, buying gold?
Warren Mosler, declared U.S. presidential candidate, 2012 (Mosler): Well, I think gold has the potential to be the next major bubble here. Norman: Really? Mosler: Yeah, there’s a couple of reasons behind that. One of them is that I think people are buying it for the wrong reason. For one thing, we have a generally deflationary environment where most other things have deflated quite a bit while gold has gone up. And I think one of the reasons people are buying gold is they have this perception that the Federal Reserve is printing money and that this will turn into inflation, and that every central bank in the world is printing money which will turn into inflation. Now when the Treasury spends, that prevents deflation and can cause inflation; but the Federal Reserve is nothing of the sort. Do you want me to go into the details why … Norman: Yes, please. Mosler: Okay. When the Federal Reserve buys Treasury securities, for example … Norman: Before you do that, I want to ask one question which I think is a misunderstood point. When people hear that the Fed is buying Treasury securities, they think they’re buying it from the Treasury itself. Mosler: Is that right? Norman: That’s not happening. They’re buying it from the public, right? Mosler: Well, if they were buying it from the Treasury themselves, they would credit the Treasury’s account with the money. And it never reaches the real economy. Nothing happens until the Treasury spends the money. Nothing the Federal Reserve’s doing has anything to do with the real economy. Norman: All right; so when they’re buying the securities, what happens? Mosler: So let’s say they buy … you got your paycheck today. You’re an investment banker, and so you have $1 million in your checking account. Norman: It’s peaches. Mosler: It’s minimum wage. Norman: Yeah, minimum wage. Mosler: You got minimum wage at one of the major banks. And how do you happen to buy a Treasury security? Well, you do it voluntarily. OK, so you would decide if a Treasury security’s a good investment or whatever, and you would buy it. And your account would get debited; the money comes out of your checking account. And instead having a checking account, you would now have a savings account called “The Treasury Security.” Now the Fed comes along and decides ... but your net worth hasn’t changed; in fact, you bought the Treasury security because you thought it would … Norman: It’s a different asset. Mosler: Yeah, it’s a different asset. Norman: You have less cash, you have an asset as a Treasury. And it’s the same network. Mosler: You haven’t lost your savings. You never hear anybody say, “Gee, I hope the government will pay off these Treasury securities so I can get my money back.” You’re never going to hear anybody say that. You feel you have your money, otherwise you wouldn’t have bought it. So now the Fed decides that they want to buy your Treasury securities. And they do that for a couple of reasons. No. 1 is that they want Treasury securities to be at a lower interest rate; and the second reason that some people ascribe, which the Fed has actually not been pushing, is that it would add to the money supply. But the people who are buying gold are worried that when the Fed buys your Treasury securities back from you, they’re now adding to the money supply. So the Fed would come into the market, and say, “I want to buy Treasury securities. And I’m going to buy them from the lowest offer.” And so you’d offer your Treasury securities at a price where you would rather have the money than the Treasury securities. So you’re happy. So now I buy them back from you. So now I’ve got your Treasury securities and you’ve got the cash. And the cash shows up as a cash position on the Fed’s balance sheet as well. So the question is, are you now inclined to run out and spend, or cause inflation because you have cash instead of your Treasury securities ... say, you’re a major bank? No. What’s happened is your assets have now gone from having Treasury securities to having cash. | 
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How do you know?
How do you know that the 'purpose' of an income tax regime and policy is solely to 'manage' aggregate demand?
Someone at the 'revenue' office let you in on it?
I see the effect.
I don't see the cause and the purpose.
Does someone in there have it all written down?