Money Creation In the Time of Quantitative Easing or Q.E. The political season is upon us. And with Thanksgiving just around the corner, complete with turkey, stuffing, and football, you might find yourself in the middle of a heated family debate about politics and money. One family member who is
We came into this crisis with a trillion-dollar deficit and very low interest rates, challenging our ability to fight this recession with standard measures, such as government spending and central bank interest rate cuts.
Regarding treasuries, Mr. Sheard is right: there is no reduction in the money supply when the Fed allows any of its $2.4 trillion of treasuries to roll off its balance sheet. The Fed merely debits the government’s checking account by the amount of any maturing bonds.
In 2013, one of the most prominent economists in the U.S., Harvard professor Martin Feldstein, warned investors, “The banks can use these excess reserves to create loans and deposits, which will increase the money supply and fuel inflation.”
For the 4th year in a row, Five Star Professional is pleased to announce that Financial Advisor Tim Hayes is one of Boston’s Five Star Wealth Managers. for 2017. About Tim Tim provides wealth management, financial planning, and retirement planning solutions to individuals and employers in MA, NH, and RI.