Bankerbob

To Monetize or Not to Monetize: Who Cares?

LJS, lets say,

Treasury sells $100 in newly created tbills, government recieves $100 in cash which it uses to fund programs...

Buyer purchases $100 in newly created tbills, buyer pays government $100 and holds tbills on balance sheet...

In this case no new money is created.

Now, if the Federal Reserve decides to get involved it "creates" $100 in new money and buys the tbills, either direct from Treasury or from the buyer.

In this case $100 in new money has been added to the financial system.

doesnt matter whether its book entry or not....... question is, does the Fed buy it or not.

Will We See a Debt-Financed Consumer Spending Spree?

Household debt to gdp is not relevant. Need to compare household debt to personal income.