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Message
re: Fed balance sheet - a question
Posted on 8/17/10 at 8:08 pm to LSURussian
Posted on 8/17/10 at 8:08 pm to LSURussian
quote:
The Fed does not have to sell an asset in order to pay for something. It creates "money" every time it pays for anything, including the light bill.
I thought the fed's operating expenses were paid for by the interest it received from its assets.
1
Posted on 8/17/10 at 8:41 pm to RaysGoodLiquor
quote:
I thought the fed's operating expenses were paid for by the interest it received from its assets.
Well, although from the overall federal government perspective there has been a swap of mortgage bonds for Treasuries, for the Fed this is not the case. The Fed is on the other side of that deal, they own the Treasuries as assets.
The Fed is earning interest from mortgage securities and from Treasuries both. Liabilities are mostly currency and bank deposits.
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