The Fed’s Silent Takeover of the U.S.
August 12, 2020 by IWB
In this episode, we look under the hood of the Fed’s massive, three-trillion-dollar expansion of its balance sheet, rationalized by officials as a necessary response to… what else? The pandemic. Fair enough.
But that’s not the end of the story. Whenever the Fed creates new reserves to purchase assets, it invariably claims that those reserves don’t “leak out” into the real economy. As this video proves, that claim is completely false. It all depends on how the Fed structures the transactions that ensue once new reserves are created and are spent on assets.
AC
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