Is it Legal for the Fed to purchase securities directly from the Treasury?

Economics Economics Questions
1

I know that it effectively does so every time it conducts open market operations but is it legal for the Fed to purchase the treasuries at an auction directly from the Treasury? I can’t find the answer any where; must be looking in the wrong places.

Oh, and I keep reading stuff by people saying the recent announcement by the Fed means they’re now simply printing money. Did I miss something or has the Fed always been printing money? Why is it being treated differently now? Maybe a bit harsher? As it should be.

References and answers would be appreciated.

2

since when is legality a property of government?

illegality is a status imposed on us BY government as a means to exact penalties other than monetary from us.

3

Although they customarily go through bond dealers, custom is becoming less important every day.

They show no restraint.

4

Yeah Yeah. I agree with you. I just don’t want to have to constantly qalify every thing I say. It’s cumbersome.

So rather I should of said, “Is it “legal” as determined by the government DESPITE the fact that the government as no authority to stipulate what’s legal and what isn’t.” There, does that make you happy?

Gosh, arguments would go much quicker if everyone around here wasn’t always looking to point out pedantic mistakes that are for the most part already understood and accepted.

5

I totally agree with you on the pedantic stuff lol

This is how it goes from the “books” I believe.

The Fed is not able to buy securities directly from the Treasury. It could during WWII but it hasn’t anymore (This is excluding the present crisis, we are talking about typical Fed)

So if the Fed wants to “monetize the debt” so to speak, it must buy securities from banks/bond dealers. The banks/bond dealers have new money, and they can now buy the new Gov debt.

Apparently the Fed just bought a bunch of debt from the government directly though however.