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dyna mo · 08-03-2011, 10:15 AM

The process of printing money creates the threat of future inflation. If the Fed does nothing, then that future inflation can wipe out real wealth and the purchasing power of the taxpayer (which is a future cost of quantitative easing). Of course, the Fed can’t let this happen. The canceling out of the Treasury debt that I suggested above is also not really a feasible option, because the Fed would have a liability with no offsetting asset

One final point. Lest one doubt that the Fed is part of the government or that the Treasury is the ultimate backstop to the Fed, Federal Reserve Notes, which are Federal Reserve liabilities, are deemed obligations of the US government under Title 12 (Chapter 3, Subchapter XII, Section 411) of the US Code.

08-03-2011, 10:15 AM
dyna mo The People's Post Industry Role: Join Date: Dec 2008 Location: invisible 7-11 Posts: 64,435	The process of printing money creates the threat of future inflation. If the Fed does nothing, then that future inflation can wipe out real wealth and the purchasing power of the taxpayer (which is a future cost of quantitative easing). Of course, the Fed can’t let this happen. The canceling out of the Treasury debt that I suggested above is also not really a feasible option, because the Fed would have a liability with no offsetting asset One final point. Lest one doubt that the Fed is part of the government or that the Treasury is the ultimate backstop to the Fed, Federal Reserve Notes, which are Federal Reserve liabilities, are deemed obligations of the US government under Title 12 (Chapter 3, Subchapter XII, Section 411) of the US Code.