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I thought the Fed bought treasury bonds straight from the government, are you saying they only buy these bond owned by banks intially?
by guiomie 4y ago
I thought the Fed bought treasury bonds straight from the government, are you saying they only buy these bond owned by banks intially?
- SevenNation 4y agoYes. The Fed buys its treasuries under QE from banks. To pay for it, a reserve asset is credited to the bank within the banking system. No net money is created.
- scottiebarnes 4y ago> No net money is created. Interesting that you're separating the responsibility of money creation to "banks within the banking system", and not the Fed, despite the Fed being the only power here who can buy unlimited assets.