You assume, incorrectly, that I support the gold standard.
The Fed does CREATE the money to finance the federal debt. The Treasury securities you speak of are sold FIRST to the Fed, then the Fed has the power to auction them off to selected buyers. The bulk of these securities are now, and have always been held by the Fed itself. Foreign holders of US debt make up less than 25% of the total $9 trillion.
When the Fed liquidates these securities, through Open Market Operations at the NY Fed, what it is doing is regulating the money supply. When investors buy federal debt the money from the sale disappears and the total money supply is reduced by a corresponding amount. When the Fed buys them from Congress the money supply is increased by a corresponding amount.
Wrong.
The Treasury securities you speak of are sold FIRST to the Fed, then the Fed has the power to auction them off to selected buyers.
Wrong again.
The bulk of these securities are now, and have always been held by the Fed itself.
Wrong, by a wide margin.
Foreign holders of US debt make up less than 25% of the total $9 trillion.
And you think the Federal Reserve holds more than foreigners? I'd like to see your source.
When the Fed liquidates these securities, through Open Market Operations at the NY Fed, what it is doing is regulating the money supply.
Yes, the FOMC regulates the money supply.
When investors buy federal debt the money from the sale disappears and the total money supply is reduced by a corresponding amount.
Yes, when the Fed sells some of their bonds, it reduces the money supply.
When the Fed buys them from Congress the money supply is increased by a corresponding amount.
Wrong. The Fed Open Market Committee buys in the "OPEN MARKET", not from Congress. You know a little which only magnifies your misunderstanding of the big picture.