Thursday, November 27, 2008

Fed Creates Money

My suggestion that the Federal Reserve Bank create money for public use without incurring an obligation to pay interest (Zero interest public debt) is now being used.
“Instead of having the Treasury borrow the cash to fund these programmes through the Tarp, we’re just going to crank up the magical printing presses and expand the Fed’s balance sheet,” said Stephen Stanley, chief economist at RBS Greenwich Capital. “For those not connecting the dots, the Treasury has essentially just outsourced the purchase of troubled assets to the Fed, with lots of leverage.”
Financial Times, Nov. 25, 2008

Now if they would just extend it to credits for General Motors and the like.

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