The Fed: In a Monetary and Macro Bind?
Real Vision: Finance & Investing
00:00
The Fed's Decision to Gobble Up US Treasury Bonds
The Fed essentially has to do here is write a check for the treasury because the treasury doesn't have the money itself. The only way you can get a commesurate increase in supply is by increasing that interest rate. So Bernanke comes up with this idea of what if we could pay banks not to lend out that money. And through the miracle fractional reserve banking that expands the money supply.
Play episode from 11:26
Transcript
