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To: ajsharp who wrote (63544)	3/26/2020 11:10:35 AM
From: diegosan	Respond to of 78464

In the third paragraph, second sentence, what was in that "cash account"? Does it go negative? Is that the national debt? TIA Diego

To: ajsharp who wrote (63544)	3/27/2020 12:09:04 PM
From: William Cloutier	Read Replies (1) \| Respond to of 78464

I don't want to saturate the thread too much with banking so it will be my last public reply on this subject. When they purchase, say, $1 million in treasury securities from a bank, the Fed increases a treasury security asset account for $1 million on their balance sheet, and decrease a cash account by the same amount. I think it's more like a debit in assets (treasury) and a credit in liabilities (deposits). Like "We are buying this security from you and you will find X$ in your account at the fed". I guess that's how banks create money, but normal banks can only create money like that (debit: loans and credit: deposits) when they respect the reserves requirement at the fed. Again, I don't think it's the same money that we can spend. It's more like central money: money that is used for reserves in the banking system. I can be wrong. I'm just starting to learn this topic. Take care WIll