The Fed doesn't actually print money.
Here's what it does instead:
It buys bonds from banks. Then it credits those banks' reserve accounts with dollars that didn't exist five minutes ago.
No printing press. No physical cash. A ledger entry at the Federal Reserve Bank of New York.
That's the base layer of monetary expansion. Everything else builds on it.
Here's what it does instead:
It buys bonds from banks. Then it credits those banks' reserve accounts with dollars that didn't exist five minutes ago.
No printing press. No physical cash. A ledger entry at the Federal Reserve Bank of New York.
That's the base layer of monetary expansion. Everything else builds on it.
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