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The govt doesn't "turn out dollars as fast as they can print them."

Thank you. Does the Fed. Reserve get it's marching orders form the Treasury, vice versa, or are they both independent from one another? One of those have to be top dog.

[ml/nj]

Does the Fed. Reserve get it's marching orders form the Treasury, vice versa, or are they both independent from one another?

I think they work together, but the system is sufficiently obscured so that its hard to tell. The Treasury prints notes (or bonds) and the Fed prints FRNs. Then they exchange them and each considers the paper from the other an asset. (I like to think of this paper as a bunch of IOMes.) It sort of an interesting aspect of our current monetary system that if the National Debt were paid off there would be virtually no more "money." This is because if the IOMes are returned to their original printer they disappear from the system.

ML/NJ