> The government is selling Treasury securities on the open market...
And the Federal Reserve is buying a lot of those treasury securities with printed money.
And the Federal Reserve is buying a lot of those treasury securities with printed money.
" The term "printing money" often refers to a situation in which the central bank is effectively financing the deficit of the federal government on a permanent basis by issuing large amounts of currency. This situation does not exist in the United States."
http://www.federalreserve.gov/faqs/money_12853.htm
Perhaps they are lying about what is really going on but I think transparency is of primary importance for the functioning of the bond market and I'm assuming they aren't lying.
The Federal Reserve does not want to do QE forever. But they have been doing that almost nonstop since 2008.
The Fed does not consider quantitative easing as just printing money. I think if it were just printing money then people would not have faith in Treasury securities and thus the interest rate would be a lot, lot higher than it is now.
EDIT: From the link supplied above:
"Global demand for Treasury securities has remained strong, and the Treasury has been able to finance large deficits without difficulty. In addition, U.S. currency has expanded at only a moderate pace in recent years, and the Federal Reserve has indicated that it will return its securities holdings to a more normal level over time, as the economy recovers and the current monetary accommodation is unwound."
But government bonds are issued by the government as a form of govt debt to finance the federal government deficit.
So doesn't that mean that money IS being printed to finance government deficit? It's just that it goes through a slightly convoluted path to get there?