Neither the Fed nor the ECB needs to worry about their balance sheets. They can create (not print) money at will. Indeed, this is exactly what they are doing at the current time. If they want to window-dress things, they can create special purpose vehicles (SPVs), move their non-performing loans to there, finance these SPVs by the money they create and live happily ever after, at least for some more years. The US does not have any debt problem nor does the EU, for the time being. All of these debt problems are artificial as I far as I can see. Hyperinflation the US or in the EU? I doubt it. The global money supply is contracting because of the ongoing deleveraging and effective lengthening of the maturities of "deposits" on the liabilities side of the "bank" balance sheets given the increasing non-performing loans on the assets side. So, I fail to understand why we need to worry about budget deficit, say, in the US and all these austerity things around the globe.
Question: Why can National Treasuries not borrow from their respective National Central Banks at zero interest directly? Best, Sabri _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
