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re: Fed balance sheet - a question
Posted on 8/17/10 at 8:34 pm to foshizzle
Posted on 8/17/10 at 8:34 pm to foshizzle
quote:
The Federal Reserve doesn't have to have any "hard" assets backing anything, nor does it need to given its mission.
So why do they (until recently maybe?) predominantly buy treasuries? If the value of the asset after they purchase it is not relevant, why not buy ... anything? Trading cards, cabbage patch dolls, collector plates, antiques ... ? I believe what you are saying I just don't understand why they would predominantly buy low risk securities if the fate of that security after they purchase it doesn't matter.
EDIT: My bad, by "hard" assets did you mean things that aren't paper?
All I'm asking is - every year, the fed rebates its profit after dividends to Congress, right? What happens if they instead post a loss?
This post was edited on 8/17/10 at 8:37 pm
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