this is somewhat off-topic, but the real Austerians and bond Nazis think of government bonds held by the Fed as being much the same as those held by the non-bank public and the banks. Perhaps even worse, since if the Fed buys bonds, it raises the stock of high-powered money (the monetary base), which automatically causes inflation (we are told).
but Sabri is right that it doesn't matter who sells the bonds to the Fed (the government or the private sector). It has the same effect on bond prices and interest rates, either way the Fed now pays more interest on more bonds to the government (at a lower rate), all else constant. -- Jim Devine / "The conventional view serves to protect us from the painful job of thinking." - John Kenneth Galbraith _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
