“Wonder how many ordinary people know what “asset purchasing” means.”
a couple of years ago on wrko in boston, there was an overnight radio show called the steve Lavelle broadcast.
the subject was price of gas. I called in and I said well its very much tied to qe and the dollars being pumped into the economy. the host didn’t even know there was such a thing as qe.
then when I told him it was the fed he went ballistic, so i’m assuming talk of the fed is verboten.
You bring up a subject that I’m not real sure of. Can the Fed (or any other agency) create money out of thin air? I think they always have to borrow the money they put into the system.
That in turn means they gotta pay it back sometimes.
So if they gotta pay it back then such ‘created’ money isn’t permanently in circulation since it the government (or Fed) would have to take back the money to pay off the creditors, plus interest.
Am I missing something here?
In the current qe process, is the Fed buying bonds that already exist in the private sector, or they borrowing from the treasury, or what?
My final question: does money get created that stays in circulation forever?
Slightly wrong. You have to go back to around 2004 to find 30 dollar oil. More than a tripling of price in 10 years, despite supplies exploding everywhere, and everyone here will still tell you there’s no inflation.
In 2009, the US national average price of a gallon of regular gasoline was $2.35