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But doesn't someone needs to print some money at some point? Let's say government issued $1B bonds, central bank bought it but in return there needs to be some
by sytelus 11y ago
But doesn't someone needs to print some money at some point? Let's say government issued $1B bonds, central bank bought it but in return there needs to be some extra cash needs to be printed and handed over to government? Government can't pay road construction crew with bonds or some credit notes, right?
- dingaling 11y agoNo, the overwhelming majority of money is purely digital. For example in 2009 the Bank of England issued £200 billion of quantitative easing, not a single penny of which was physical. M0 is the closest economic measure of what you and I consider physical money though it does include some non-physical assets that can be quickly converted to cash. In the USA today, M0 is about 15% of the total money system.