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from what i understand, when the fed does stimulus, they have to take out a loan/bond so as long as the "value" is canceled out by the loaned "debt" im not sure
by andrekandre 4y ago
from what i understand, when the fed does stimulus, they have to take out a loan/bond so as long as the "value" is canceled out by the loaned "debt" im not sure why its going to create inflation?
- WalterBright 4y agoBecause there is nothing backing it. Normal bank loans are not inflationary because collateral must be supplied to back it up. No collateral, no loan. For example, if you take out a mortgage, your house is collateral. The government just issues more debt to pay off the old debt.