The Fed is only doing what it always does: loan money to national banks as a means of increasing the money supply. The difference between the way we do it and the way a "banana republic" does it is that in America, the bank must pay the money back to the Fed and with interest. While in the case of countries that let their inflation get out of control, the government just pays its debts with new printed money - true printing press money.
The Fed does not do this only at times of economic stress. The fed always does it. The only difference here is that interest rates are a bit lower than average, and the amount auctioned (when other recent auctions are taken into account) is a bit larger than is normal.
CPI growth (not counting a blip in energy in February) is at low enough levels to make this auction a reasonable proposition. On the other hand our GDP looks like it could use some stimulation.
Current Events » in reply to This is getting silly- Fed printing up more money to thow at bad banks.
Let's not go overboard.
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- This is getting silly- Fed printing up more money to thow at bad banks.
- the USA has over $140 Trillion in financial assets...
- Let's not go overboard.
- re: This is getting silly
- BTW