For starters...Printing press issues..to print $750 billion would require them to print 7.5 billion $100 bills which they don't have the capability to do-in a normal year with full on printing they may get $30-$40 billion in new money (net isn't that high as old bils are withdrawn). If they actually started to print larger bills, the risk of massive inflation and US bond market dislocation is too great. So the banks may stay solvent in that situation but it would kill the rest of the economy.
I wonder if the Fed bought securities from the banks and GSEs if that would give the banks and GSEs more money?
If Roubini is even close to right, the banks have about another $2 trillion to right off--and his model only assumes 9% unemployment (I think it will go higher).
Who did the Fed borrow money from?
Ahem--fractional reserve system. Deposits from member banks.
They just added how much to their balance sheet? You think they bought it with $100 bills? LOL!
Who did the Fed borrow money from?
Ahem--fractional reserve system.
The Fed doesn't borrow using the fractional reserve system. Ahem--the Fed doesn't borrow.
Deposits from member banks.
Are held at the Fed. The Fed doesn't need those deposits to create new money.