On the same note, what do you think about Bernacke’s statement yesterday that the Federal Reserve isn’t printing money? The cash has to come from someplace, so if the Fed isn’t printing it, just where is it coming from??
The Fed just needs to change a database entry to say an account at the Fed has 1 billions dollars in it. The Fed then buys 1 billion dollars of T-bills by electronicly transfering money from the Fed account to the government account.
Ta-da! The Federal Reserve just put an additonal 1 billion dollars into circulation without printing anything.
Just because they aren’t printing money doesn’t mean they aren’t inflating the money supply.
That’s about what i though was going on. It’s all about virtual balance sheets and electronic transfers.
Thanks!