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> No money is paid from the government (according to you) but they acquire debts (on behalf of citizens) with owed amounts of $8B? No, the government does not
by jaekash 6y ago
> No money is paid from the government (according to you) but they acquire debts (on behalf of citizens) with owed amounts of $8B?
No, the government does not acquire debts, the only entity here that acquired debts is Walmart.
When walmart wants capital they have two options, issue stock, or issue bonds. When they issue bonds buyers can buy the bonds. The bond is a contract which says that the Walmart will pay the holder of the bond certain monies.
What happened here is Walmart issued bonds, those bonds were bought by some legal entities, then the Fed bought those bonds from the legal entities that held them.
So the fed paid money, which it created out of thin air, to some legal entities, in exchange for contracts which require that Walmart pays the Fed some money (probably quite a bit more than what the Fed paid for those contracts). When Walmart pays back the principle of the Bond the money basically gets deleted and the yield is added to the Federal reserves balance sheet.
(I am not an economist, so I may be wrong on some terms here).
- pbhjpbhj 6y ago>So the fed paid money, which it created out of thin air // By devaluing currency, a cost to all holders. They can make virtual numbers, they can't make value. There's a cost, the cost is just obscured. The way you describe it is clearly wrong, otherwise the Fed could buy everyone's debt and save the economy of the entire World. Yay, just "print money" we'll all be rich!
- jaekash 6y ago> The way you describe it is clearly wrong Please cite the inaccuracy.