8 ms·
Treasury mints the coin. Treasury trades the coin to the Fed for existing bonds the Fed already owns. Treasury extinguishes the bonds. Fed's balance sheet is
by panarky 5y ago
Treasury mints the coin.
Treasury trades the coin to the Fed for existing bonds the Fed already owns.
Treasury extinguishes the bonds.
Fed's balance sheet is unchanged, minus a trillion of bonds, plus a trillion of coin.
Treasury's balance sheet is unchanged.
Zero new money in circulation.