How the Fed's "Money Printer" Really Works

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italicbold · 2020-08 · Strong recommendation

The modern banking system does not use fractional reserve lending. Highly recommend this video to understand and this channel in general: [VIDEO] Skip to 1:14.

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throw0101a · 2021-05 · Recommendation

> Savings in a bank account will be loaned by the bank to another business. This has not been how banks have worked for decades: * [LINK] Banks create loans typing something into a computer screen and money shows up in the businesss' account. No savings required. 99% of money created is not by the Fed "printing money", but rather by private bank loans. A twenty minute video summarizing the above paper: * [VIDEO] Interview with the paper's author: * [LINK]

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throw0101a · 2020-12 · Recommendation

Strictly speaking, in the modern era, it is not "a government" that decides to print money, but rather the central bank, which are considered independent on government and do (should) not follow the orders of politicians. The central bankers are hired for a fixed-term (though renewable) and are given a mandate: > The Federal Reserve works to promote a strong U.S. economy. Specifically, the Congress has assigned the Fed to conduct the nation’s monetary policy to support the goals of maximum employment, stable prices, and moderate long-term interest rates. When prices are stable, long-term interest rates remain at moderate levels, so the goals of price stability and moderate long-term interest rates go together. As a result, the goals of maximum employment and stable prices are often referred to as the Fed’s “dual mandate.” * [LINK] If 'printing money' helps to accomplish that mandate they will do so, but they will (theoretically/ideally) not print money just because it would be convenient for political purposes. It should also be noted that in most/may modern economies, private banks actually create the money the supply through issuing loans: * PDF: [LINK] Good video by Ben Felix on the topic: * [VIDEO]

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