Anyone willing to bet on a devaluation of the dollar when all the debt bubbles burst?

[Mikebert]

(05-24-2016, 01:58 PM)Kinser79 Wrote:

(05-24-2016, 09:18 AM)Mikebert Wrote:

(05-24-2016, 12:14 AM)Kinser79 Wrote:

(05-23-2016, 06:27 PM)Mikebert Wrote:

(05-21-2016, 12:19 AM)Kinser79 Wrote: The Fed only has two leavers it can work economically, the interest rates and money printing.  The interest rate is already at its minimum.  That leaves money printing.

Interest rate policy IS money printing.

I would argue that interest rate policy is indirect money printing.  Lowering the interest rate usually signals to borrowers it is time to borrow and that for spenders it is time to spend.

Interest rate policy is performed using open market operations.  If the Fed wants to keep interest rates low they buy government debt.  They buy it with dollars they create.  Monetary easing adds money to the economy.  When the Fed hikes rates they sell government bonds for dollars, removing those dollars from the economy.

Normally the bond being uses are short term government securities.  One could do open market operations with other kinds of bonds.  When they do that they call it quantitative easing.  During 1942-1951 the Fed performed open market operations with both short term and long term debt maintaining interest rate pegs on both.

Yes, Mike...I know what the Fed does.  I've read a book or two you know.

Then why did you imply interest rate policy was separate from money creation?