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Dollars are a liability of the Fed. If they were to print dollars and keep them then that would increase both sides of the balance sheet without changing the am

• Iwan-Zotow 4y ago
  you know that coins are minted by gvnmnt, not Feds?
• User23 4y ago
  Not really. Reserves are a liability of the Fed. The only way a private citizen gets a hold of them is Federal Reserve Notes. Private citizens can also hold dollars in coins, which are not a liability of the Fed. And of course the money deposited in a bank account isn’t reserves either. In that case reserves don’t even enter the picture unless you withdraw notes or write a check that’s cashed at another bank. And that last point is the 10,000 pound gorilla in the room that almost everyone ignores. The Fed’s primary mandate is not, as is commonly stated, to control inflation and unemployment. Rather, it is maintaining the operational integrity of the payments system. And they absolutely have to do that or people will not be able to transact in dollars. And of course the party that transacts more dollars than anyone else by far happens to be the one that created the Fed and can reorganize or destroy it if the Fed is foolish enough to create the political will to do so.