> When the federal reserve "prints money", it doesn't just mail million-dollar checks to random Americans. It does one of two things. It either (a) purchases so

> When the federal reserve "prints money", it doesn't just mail million-dollar checks to random Americans. It does one of two things. It either (a) purchases some other asset [generally US treasury bonds] on the free market, thereby injecting more cash into the system than there had been before, or (b), loans money to a bank, who will then loan it to other people who will then spend it. The part (a) about "purchases" is not specifically incorrect, but it is misleading and shows the author may not completely understand how things work. Typically the federal reserve SELLS treasury bonds. They are sold for less than face value with a promise to pay the full value on the redemption date. The difference, of course, is the yield, or more commonly the "interest" earned by holding the bond to maturity.