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Actually money from selling bonds does increase the money supply. The government hands out that money, and people use it to buy more bonds, then the government
by ars 4y ago
Actually money from selling bonds does increase the money supply.
The government hands out that money, and people use it to buy more bonds, then the government hands out more money, and repeat. There is now more money in the world.
Yes, if you unwind everything it will go back down, but that's never actually done.
- RhodesianHunter 4y ago> Actually money from selling bonds does increase the money supply. With a corresponding liability that will eventually remove more money from the system than was introduced. This is of course a dramatically different equation.