Whether or not the Fed can write a blank check to the
government is only marginally relevant. The Fed is
creating money out of thin air to buy the government
bonds, so, GS sees $130 oil. If the Fed wrote a blank
check to the govt, GS would probably see $600 oil? -vbg-
Of course, Ben would say... Hmm... it is VERY relevant,
I reside in NYC, not Harare. In Zimbabwe the central
bank printed money to finance the government directly, but
that money devalued so fast, the government still ran
huge deficits, so the central bank printed more money to
finance new deficits. -vbg-
In the end, if the SAME amount of money is printed, then
is it relevant, really, where exactly it goes?
I think in Weimar money was created the same way
the Fed does it, but I need to check. So really, does it
matter? |
