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Unlike FTX, central banks have the power to create money out of thin air, while the governments that operate them have the power to create demand for money out
by vkou 4y ago
Unlike FTX, central banks have the power to create money out of thin air, while the governments that operate them have the power to create demand for money out of thin air, through taxation.
Governments thus, control both the demand for, and the supply of money.
- lupire 4y ago> governments that operate them have the power to create demand for money out of thin air, through taxation. This is Modern Monetary Theory, but government never actually uses that power. Instead, they use "open market operations" on securities to manipulate money supply, and taxation for very roughly balancing spending.