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Journal 11-4 - out enough money to the government to fund...

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Aakash Shah 11/4/2010 Professor Reaves Introduction to Business The Federal Reserve makes a huge decision this week. They have offered to print money to buy nearly as much United States treasury debt in the next eight months as the United States will issue. The week the Fed also buys $600 billion more of U.S. treasury debt; this is setting off a hug debate about the risks of central bank entwining its policies so tightly with the government’s fiscal fortunes. Basically the Federal Reserve is lending
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Unformatted text preview: out enough money to the government to fund its operations for several months, which is called “monetizing the debt.” Many people are seeing this as a step towards spiraling inflation and also they think it risks reckless government spending. The Central bank is independent today and its officials note that the Treasury isn’t demanding that the Fed buy government debt. Fed officials say that puts them in a position to sell the bonds when they want....
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