TheRealMafoo on 31 May 2009
| akuma587 said:
But these aren’t ordinary times. Banks aren’t lending out their extra reserves. They’re just sitting on them — in effect, they’re sending the money right back to the Fed. So the Fed isn’t really printing money after all. |
Plus this line is bullshit. He is implying it's the same thing to sit on the funds as it is to pay the fed back.
What's going on right now, is akin to giving out a line of credit that no one is charging on. Being that they are not charging on this credit, the Fed does not need to print money. It can just spend the money the banks aren't. As soon as the economy starts to recover, and banks start lending in masse, the fed will need to start printing.
