Results 1 to 3 of 3

Thread: What bonds can the fed buy? What mechanisms can it use to make cash available?

  1. #1
    Professor
    pdog's Avatar
    Join Date
    Jul 2011
    Location
    Searching for answers.
    Last Seen
    06-30-17 @ 01:38 PM
    Gender
    Lean
    Undisclosed
    Posts
    1,969

    What bonds can the fed buy? What mechanisms can it use to make cash available?

    I know the fed cannot buy bonds directly from the Treasury. In otherwords, the treasury cannot issue a bond and have it instantly converted to cash in the treasury's account.

    But are there purchases available to the fed that would indirectly provide usable money to the Treasury to service debt. I am exploring some of the "printing money theories" and trying to understand our current law.

    Note, I am NOT claiming that we can print endless amounts of money, no suggesting that we do so. I am not saying there are not inflationary or confidence risks. This is not what this thread is about at all. I'm just trying to understand the mechanics in a vacuum, so please stay in the academic realm and avoid the political B.S. in this thread.

  2. #2
    Sage

    Join Date
    Jul 2013
    Last Seen
    Today @ 05:26 AM
    Lean
    Independent
    Posts
    40,183

    Re: What bonds can the fed buy? What mechanisms can it use to make cash available?

    Quote Originally Posted by pdog View Post
    I know the fed cannot buy bonds directly from the Treasury. In otherwords, the treasury cannot issue a bond and have it instantly converted to cash in the treasury's account.

    But are there purchases available to the fed that would indirectly provide usable money to the Treasury to service debt. I am exploring some of the "printing money theories" and trying to understand our current law.

    Note, I am NOT claiming that we can print endless amounts of money, no suggesting that we do so. I am not saying there are not inflationary or confidence risks. This is not what this thread is about at all. I'm just trying to understand the mechanics in a vacuum, so please stay in the academic realm and avoid the political B.S. in this thread.
    I am not sure of the US system and so will follow this thread with great interest.

  3. #3
    Iconoclast
    DaveFagan's Avatar
    Join Date
    Mar 2011
    Location
    wny
    Last Seen
    Yesterday @ 09:27 PM
    Lean
    Conservative
    Posts
    6,936

    Re: What bonds can the fed buy? What mechanisms can it use to make cash available?

    Quote Originally Posted by pdog View Post
    I know the fed cannot buy bonds directly from the Treasury. In otherwords, the treasury cannot issue a bond and have it instantly converted to cash in the treasury's account.

    But are there purchases available to the fed that would indirectly provide usable money to the Treasury to service debt. I am exploring some of the "printing money theories" and trying to understand our current law.

    Note, I am NOT claiming that we can print endless amounts of money, no suggesting that we do so. I am not saying there are not inflationary or confidence risks. This is not what this thread is about at all. I'm just trying to understand the mechanics in a vacuum, so please stay in the academic realm and avoid the political B.S. in this thread.
    Nowadays, the money is not printed, it is a digital entry. There is lots of room for collusion. Since the Fed has accepted as collaterol many of the questionable Mortgage portfolios produded just prior to the 2007/8 crash, the whole applecart remains susceptible to a "bad apple." Everyone knows that this US Reserve Currency is not backed by any substance, yet it continues to function because of the Global Elite of big money and their poossible catastrophic exposure if they allow it to crash. It is a house of cards with an underlying psychology to maintain the status quo until alternative safe investments can be found. That is the threat of the BRICS Nations.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •