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> 1. The Federal Reserve holds assets (mainly stocks and bonds) whose value exceeds the value of all the dollars that have been issued. This is not true at all
by qeternity 6y ago
> 1. The Federal Reserve holds assets (mainly stocks and bonds) whose value exceeds the value of all the dollars that have been issued.
This is not true at all. The Fed does not hold equity (stock) and the Fed is also not the only entity that can create money. Lots of money is created by regular banks lending out deposits. This is called fractional reserve banking and until recently was the primary mechanism for money creation.
- OscarCunningham 6y ago> The Fed does not hold equity (stock) Thanks for pointing out this error. I thought the Fed had been buying stock as part of their recent expansion, but checking their balance sheet https://www.federalreserve.gov/releases/h41/current/h41.htm https://www.federalreserve.gov/releases/h41/current/h41.htm I see that you're right. > Lots of money is created by regular banks lending out deposits I was only counting Federal Reserve accounts and printed money as dollars. Dollar-denominated accounts at regular banks have value because of the assets held by those banks.