Re: Obama XVII: Do You Take Your Tea Party with One Sugar or Two?
Anyone actually buy what Bernanke is selling? where does the Federal Reserve BANK get the $600billion to buy the US treasury bonds (debt) ?
http://finance.yahoo.com/news/Berna...3.html?x=0&sec=topStories&pos=1&asset=&ccode=
Anyone actually buy what Bernanke is selling? where does the Federal Reserve BANK get the $600billion to buy the US treasury bonds (debt) ?
http://finance.yahoo.com/news/Berna...3.html?x=0&sec=topStories&pos=1&asset=&ccode=
is, in effect, printing more money. In the interview, Bernanke called that a "myth." He insisted the Fed isn't printing money when it buys Treasurys and said the program won't expand the amount of money in circulation in a "significant way."
Lou Crandall, chief economist at Wrightson ICAP, said Bernanke is right that the Fed's purchases won't significantly change the amount of money circulating in the economy. That's mainly because banks aren't lending most of the money they already hold in reserve. When the Fed buys Treasurys, it increases the reserves in the banking system. For those reserves to actually "create" money, the banks would have to lend it.
Still, Crandall suggested that the bond-buying program creates the appearance of printing money, something that could put the central bank's credibility at stake.