Cato @ Liberty » More Cheap Money from the Fed

More Cheap Money from the Fed

Posted By David Boaz On March 19, 2009 @ 11:56 am In Finance, Banking & Monetary Policy | Comments Disabled

The Federal Reserve announced that it would create $1.2 trillion out of thin air ^[1] and use it to buy mortgage-backed securities and Treasury bonds, even though ^[2]

Some Fed leaders have resisted buying Treasurys in the past because they were unsure whether it would help reduce borrowing costs and because they feared that it would appear that the central bank was simply printing money to finance the government’s deficit, a hallmark of countries with poorly managed economies.

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[1] out of thin air: http://www.ncpa.org/pub/ba611

[2] even though: http://www.washingtonpost.com/wp-dyn/content/article/2009/03/18/AR2009031802283.html?nav%3Dhcmodule&sub=AR

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