timdaub
@timdaub.eth
My takeaway from online research: unclear if the Fed’s new loan program that collateralizes MBSs and bonds prints new money or if it’s redistributing. Waiting for someone to publishing something definite. But liquifying bond-locked-up cash makes a lot of unallocated new cash slash around now.
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mad0perator.crypto
@mad0perator
They are buying debt at par with 100% margin. They are creating money. If I have a collateral trading at $1 they will give me $2 for it
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timdaub
@timdaub.eth
this is exactly the issue with everyone discussing online. I don‘t understand enough. If e.g. the FDIC had a budget in line with how many deposits are insured, then they could take that money and redistribute it to make depositors whole. Is this the case? I don‘t know
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timdaub
@timdaub.eth
or is the offer of credit creating the new money?
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mad0perator.crypto
@mad0perator
An unsecured loan from the Fed is always new money as far as I understand it. This may even be illegal actually.
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timdaub
@timdaub.eth
No I thought they take the underwater MBSs and bonds as collateral
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mad0perator.crypto
@mad0perator
They do but I still think it is new money. Let me get a source for you. The obfuscation is intentional.
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mad0perator.crypto
@mad0perator
Forgive me for not bringing you the source yet, juggling alot right now
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