2min chapter

The "What is Money?" Show cover image

An Examination of Central Banking with Joseph Wang (WiM234)

The "What is Money?" Show

CHAPTER

What Is the Difference Between Money and Treasury Bonds?

When the Federal Reserve buys US government bonds, you said they're just changing the composition of the asset mix. The way that I would think about this is that a Treasury security is a form of money. If you have a $100 bill, it's printed by the Federal Reserve, by the government. Is that really so different from $100 in Treasury bonds? Also no credit risk, also very liquid. So Treasury bonds really, in my view, are just another form ofmoney. There's just basically money that pays interest.

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