Ok following most of my readings from austrians, the FED is responsible for the creation of fiat money, however I recently heard somewhere that it is the treasury department, not the FED, that prints money.
go!
The Bureau of Engraving and Printing prints the actual notes, and the US Mint produces the coins. Both are agencies of the Treasury Department.
Hardly any money ‘in circulation’ is actually represented by this physical specie, though. It’s mostly just numbers on a bank’s computer. The Federal Reserve expands the money supply purely digitally. The physical notes are actually produced on commission of the Fed, though it is a government agency doing it.
It’s the Fed, not the FED.
The M0 money supply is the physical coin and cash in circulation. The Austrian definition of money (which they call “True Money Supply” or TMS) resides somewhere between M2 and M3. As you can see, there is a great deal more money than there is physical cash and coin. Hence, when Austrians speak of the Fed “printing money” they are speaking metaphorically since the Fed does not really print anything. The Fed effectively and intentionally increases the money supply (TMS) which necessarily results in a devaluation of the dollar relative to the previous money supply; this is what Austrians are talking about when they say the Fed is “printing money.”
Clayton -