Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

To: Vermont Lt
> And they continue to create several billion new dollars every day. What could go wrong?

The vast majority of money is created by commercial banks via lending due to the "fractional reserve" model.

17 posted on 07/01/2021 6:26:32 AM PDT by SecondAmendment (This just proves my latest theory ... LEFTISTS RUIN EVERYTHING !)
[ Post Reply | Private Reply | To 15 | View Replies ]


To: SecondAmendment

That is normally the case. Except its not.

The Fed is still purchasing MBS at an alarming rate; they are the largest single holder of mortgages in the nation.

Also, the banks are making their Net Interest Margin by placing their reserves at the Fed overnight—so they don’t HAVE to lend.

I understand how the banking system works. The Fed buying mortgage backed securities is not “normal.”


24 posted on 07/01/2021 7:31:59 AM PDT by Vermont Lt
[ Post Reply | Private Reply | To 17 | View Replies ]

Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson