tomatden

Can the Fed Really Just Print Money?

The Fed can create dollars, but cannot do too much about the velocity of the newly created dollars, which is the necessary component for inflation to take hold. But what about fiscal policy (borrow and spend) of the US govt? Take a govt sponsored infrastructure project for example. This type of project would create jobs and would temporarily increase velocity. This false signal to the economy could set the credit bubble back to "reflate."