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And yet the Fed is able to buy back treasuries and corporate debt with funds conjured out of thin air. There's a person at the Fed who types in the amount of mo
by vmh1928 6y ago
And yet the Fed is able to buy back treasuries and corporate debt with funds conjured out of thin air. There's a person at the Fed who types in the amount of money they need that day. I think they're using a Node.js app feeding Kafka and a Cassandra database.
As an illustration I'll show you how it works:
Funds Available for Bond Repurchases: $1,000,000,000,000
And just like that a trillion dollars!
- A4ET8a8uTh0 6y agoAnd the question that gets lost somewhere, whenever we talk about those is that it does not just appear without any consequences down the road. The current spending spree practically guarantees higher taxes on everyone if the existing system is to remain in place. For the record, I agree with the gist of your message. It seems a little too easy to conjure up magical money out of thin air.
- vonmoltke 6y agoThe Fed doesn't buy back anything. It buys government and corporate bonds just like any other investor. It just does so with an arbitrarily-large pool of money.
- rbanffy 6y agoAnd, as we all know, money is a consensual hallucination. As long as we all play along and pretend it's real, it's real.