3 ms·
To take back the money they would need to sell the assets they bought to inject money into the economy in the first place, then they would need to pretend the m
by CyberRabbi 5y ago
To take back the money they would need to sell the assets they bought to inject money into the economy in the first place, then they would need to pretend the money gained in that sale never existed. Usually those assets are bonds so it’s unlikely they can call in those bonds before they are due and hopefully when they are due the bond debtors are able to pay.
- ArtTimeInvestor 5y agoThe debtor is the government, right? So unless the government collects more taxes, it is probably not able to pay.
- CyberRabbi 5y agoThe debtor is not always the government. The fed buys bonds in smaller banks, among other assets.
- ArtTimeInvestor 5y agoI thought banks don't want anymore money and even charge negative interest when you give them some against their will. Why would a bank take FED money in?
- CyberRabbi 5y agoThe same reason any business takes on investment/debt.
- QuesnayJr 5y agoThey don't call in the bonds. They either hold them to maturity, or sell them in the open market.