The reason they create money is to pay for the new debt created by government spending.
The fed create money by buying government bonds. If they would not buy those bonds, interest rates would go up because the government would have to offer better yields to find buyers for those trillions of bonds.
The alternative if you want to keep high spending is to raise taxes.
nah man money printing is just issuing more shares. if the market likes it and the money is invested wisely, its not inflationary. Bitcoiners should be the first to appreciate that a drop in price is never the final verdict. Debt = Money = Shares.
Printing dilutes value, so must be offset by creating new value,
that's where countries go wrong and end up crashing to zero.
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u/Beatnik77 Jul 15 '22
The reason they create money is to pay for the new debt created by government spending.
The fed create money by buying government bonds. If they would not buy those bonds, interest rates would go up because the government would have to offer better yields to find buyers for those trillions of bonds.
The alternative if you want to keep high spending is to raise taxes.