the above link gives some info about the federal reserves balance sheet.
assets totaling 2.1 trillion
to aquire these assets, did the federal reserve, for the most part, do the oft mentioned ‘money from thin air’ routine?
when an asset is call ed a security…is this likely yo be a bond of sorts? a bond being a govt tax initiative?
also…by purchaing the 2.1 trillion of assets (if true) is it possible that an amount nearly 10 times this much would enter various loan market s with banks and is this an unusually large asset amount for the fed to have - an anomaly, iow?
We have no way of knowing for sure where the funding to purchase the assets in the balance sheet came from because the Fed’s open market operations (where they create 'money from thin air) is not subject to audit. I suspect that most of the funding did come from the creation of new money.
The graph in your link clearly shows that government bonds, which were pretty much the whole balance sheet until January 2008, are no longer a major part of it. They have been replaced by mortgage-backed securities, equity shares of banks (that’s what “Maiden Lane and Other Assets” is), reverse repos (“Net Borrowings”), and shares of Fannie Mae and Freddie Mac (“Agencies”).
The pyramiding effect on bank reserves on these assets is different and probably lower than it was with treasuries. I suspect that much of this money ended up in the stock, bond, and derivatives markets instead of in the banks.
We have no way of knowing for sure where the funding to purchase the assets in the balance sheet came from because the Fed’s open market operations (where they create 'money from thin air)…
i guess.. i will email them. it shouldnt be to difficult to find that out. i expect it is common knowledge for quite a few.
i didnt know that the federal reserve could put money into stocks and such. i was told omo (the main way that new money entered the banks system) were specificlly perfomed to manage inter bank lending rates—thats what i was told. it seems odd so much confusion and dishonesty exists over something that is supposedly for the people yet they are subjected too.
what could a mere few billion is stocks do for the fed?
The Fed can put money into anything it wants to. It has unlimited power over the economy of the U.S. It has extended its power far beyond managing inter-bank lending rates in the past two years.
If you email them, I’d appreciate it if you would ask them how many of their mortgage-backed securities are backed by commercial properties. I’m not sure that anyone at the Fed even knows exactly how much new money was created in the past two years.
The Fed turns all of its profits into the government, so it’s not about profits, it’s about power.