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Anyone who buys Treasury bills is paying that interest to the Fed. So banks, pension funds, social security, etc. The Fed’s debt is made up of (other) Treasury
by jahewson 8y ago
Anyone who buys Treasury bills is paying that interest to the Fed. So banks, pension funds, social security, etc.
The Fed’s debt is made up of (other) Treasury bills which it purchased during QE using “printed” money.
If this makes your head spin, then you’ve probably understood it correctly.
- taysic 8y agoSo are you saying that if the Fed prints $x money, it gets back $x money + interest. It is using the interest to pay back the $x money... and then in theory it erases it from its balance sheet. What does it do with the excess money it collects?
- ceejayoz 8y agoThe excess goes to the Treasury. https://www.nytimes.com/2018/01/10/business/fed-profits-treasury-2017.html https://www.nytimes.com/2018/01/10/business/fed-profits-trea...
- credit_guy 8y agoWait, if you buy a Treasury bill, you pay interest, rather than receive? Doesn”t sound right.