Bernanke is lying???????

Discussion in 'Economics' started by misterno, Jan 10, 2011.

  1. Read below;

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    In an exchange with readers on Time magazine’s website this past weekend, a reader asked Mr. Bernanke why the Fed is creating dollars “out of thin air.” Mr. Bernanke said it wasn’t. “These policies are not leading to increases in the amount of currency in circulation,” he said.
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    How is this possible? Or is he lying?

    http://blogs.wsj.com/economics/2010/12/22/is-the-fed-printing-money/
     
  2. lol, of course he is lying, but the Fed simply marks-up the account of the bank(s) in question... no actual currency is printed.
     
  3. FED is lying...for sure.
     
  4. Doesn't the article explain it rather clearly?
     
  5. Fed first increases “electronically” the amount of money in an account a Bank has with the Fed and then - when the economy heats up - the Fed will be paying interest on the money the banks keep in these accounts in order to avoid that they flood the economy with this money?

    This is crazy
     

  6. He's not lying. Before saying someone is lying perhaps you should spend some time learning how money creation works.
     
  7. "money creation" :eek:
     
  8. This is incorrect... The Fed always pays interest on excess reserves the banks hold in their accounts, regardless of what the economy is doing.
     
  9. I think the point is that the Fed will pay sufficient interest so the banks will want to keep the excess deposits with the Fed rather then lend them out.
     
  10. okay he is not lying but how about this?

    Fed first increases “electronically” the amount of money in an account a Bank has with the Fed and then - when the economy heats up - the Fed will be paying interest on the money the banks keep in these accounts in order to avoid that they flood the economy with this money?

    This is crazy
     
    #10     Jan 10, 2011