3 ms·
> the Fed could buy it up and pay interest to itself. With what money..?
by epolanski 3mo ago
> the Fed could buy it up and pay interest to itself.
With what money..?
- jordanb 3mo agoYou're asking where the Fed gets money?
- epolanski 3mo agoI'm just making you realize that what you're describing is inflationary.
- jordanb 3mo agoSo is the US Treasury actions. The US Treasury is using dollars to buy yen on the open market to support the price of yen versus the dollar.
- eigenspace 3mo agoIt's actually using Euros to do it instead of USD.
- jordanb 3mo agoWhich it had to buy using dollars..
- jfengel 3mo agoThey have the option of simply putting it on their books, but that is the very last option. They would rather borrow it. Sometimes they borrow it from themselves at artificially low rates, which is still better than simply not treating it as a debt at all. Their preferred option is to auction off bonds. Though just at the moment rates on those bonds are extremely high, because reasons.
- epolanski 3mo agoYou're confusing the federal reserve with the treasury. Two completely different and orthogonal institutions. Also, rates are not high, they are historically well below the 30 years average.