> DUDE. WHY WOULD BANKS EXCHANGE $X IN ASSETS FOR $X IN CASH FROM THE FED. THAT WOULD BE POINTLESS. IT WOULD NOT CHANGE THEIR BALANCE SHEET MATERIALLY? Actuall

> DUDE. WHY WOULD BANKS EXCHANGE $X IN ASSETS FOR $X IN CASH FROM THE FED. THAT WOULD BE POINTLESS. IT WOULD NOT CHANGE THEIR BALANCE SHEET MATERIALLY? Actually, that's precisely what the Fed normally does. Banks need to maintain cash on their balance sheet to meet reserve ratios; being able to trade their assets in for cash at market price allows them to do precisely that. https://en.wikipedia.org/wiki/Open_market_operation https://en.wikipedia.org/wiki/Open_market_operation Or to put it another way, OMO shouldn't not magically increase a bank's assets (which is what would happen if you took a $1 bond and gave it $2 in cash), but it should increase the amount of cash. It is not 'pointless' -- trading cash for assets, at the market price, is precisely how monetary policy works. https://www.newyorkfed.org/aboutthefed/fedpoint/fed32.html https://www.newyorkfed.org/aboutthefed/fedpoint/fed32.html "The Desk initiates this process by announcing the OMO through an electronic auction system called FedTrade, inviting dealers to submit bids or offers as appropriate ... The dealers' propositions are evaluated on a competitive best-price basis" It's by definition a market price because the transactions are done via open auction to anyone on the Street. Btw, your source is an op-ed contributor whose main thesis is that the Fed is up to no good, and also doesn't provide any references. He basically assumes that all the assets the Fed purchased are bad assets, without any proof. I took a look at those charts you shared and looked back and the Fed balance sheet. The vast majority of assets are T-bills, T-bonds, MBSes, e.g. NOT crap assets. > -----> The burden of proof is on you <------ I don't really agree. We have two differing points of view -- why do you automatically get presumed to be correct? This is a forum discussion, not a trial. But if it were, I think the burden of proof falls onto the person alleging wrongdoing, like you're doing here. > You can't win this one. What makes you think this is about winning? I like to share why I hold my opinion and also see where other people are coming from, but frankly, you seem to be turning this into a personal pissing contest. It's pretty obvious you made up your mind, and no amount of reasoning or evidence from me is going to sway you. Given that that we can't even agree on very basic facts, like how the Fed goes about its normal daily business, or its governance structure, which are all pretty easily verifiable on Wikipedia or mainstream news sources, I'm not sure what value there is to continuing to discuss this other than getting us both worked up into a lather. Anyway, thanks for sharing :)