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" They buy these bonds with newly created money. " They buy the bonds with different bonds. One bond is a (say) 25 year bond at 2.5%, the other is a perpetual
by neilwilson 5y ago
" They buy these bonds with newly created money. "
They buy the bonds with different bonds.
One bond is a (say) 25 year bond at 2.5%, the other is a perpetual bond at federal funds rate that can only be held by those with a Federal Reserve account.
And all that does is change the composition of the asset side of a bank meaning they get less free income.
- im3w1l 5y agoThe perpetual bond is arguably money.
- neilwilson 5y agoIt's all money. Money things are everywhere and are perpetually created and destroyed all the time.