SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (91384)2/7/2008 7:06:24 PM
From: Real Man  Read Replies (1) | Respond to of 110194
 
Thanks! Sorry, I don't get it.

A dealer buys the bond at a Treasury auction, sells it on the
market. The Fed comes in, buys the bond off the market, with
money created out of thin air. Now, that's called a COUPON
PASS. That's monetization, or so we were told.

Now, the Fed goes directly to the Treasury and buys the bond
with money created out of thin air, eliminating the middleman.
This, in turn, is not monetization. Why? How do the two processes
differ?



To: bart13 who wrote (91384)2/7/2008 7:26:55 PM
From: Real Man  Respond to of 110194
 
The net result of both processes is that the Fed got the
bond, and the government got paid for the bond with cash
printed electronically out of thin air. The middleman gets
nothing. Well, some tiny commissions or something -g-


HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News