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To be more specific, central banks are allowed to create money. Their liability is /dev/null. It's how they added trillions to their balance sheet during COVID.
by dannyw 5y ago
To be more specific, central banks are allowed to create money. Their liability is /dev/null. It's how they added trillions to their balance sheet during COVID.
- endisneigh 5y agoNot really their liability is basically the present value of the future which is indeterminate, not null. If the future pain is greater than the present value, or billions printed, then they printed too much, otherwise it was worth it. You can’t really know for sure if it’s worth it now though.
- baby 5y agoI think what he means is that they can literally credit an account with new money in their database and it would work.
- endisneigh 5y agoYes but my point is that the liability and asset paradigm described still will hold. It’s simply that the liabilities are held by people who aren’t born or are obsfucated to the point that people don’t realize they are holding them. Inflation is one example