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Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010)

Terry in Austin

(1000+ posts) Send PM | Profile | Ignore

Tue Mar-10-09 02:41 PM
Response to Reply #1

4. Treasury notes

The US sells Treasury debt -- bonds, notes, etc. -- to anyone who wants to buy it. Currently, the Chinese are big buyers of treasury securities, but the Brits are even bigger.

The really sweet part (if dizzying) is how we use this debt to create our US dollars. It's called "monetizing the debt." If Mr. Soong in Shanghai wants to sell his $10,000 Treasury note, the Fed accepts it, says "thank you," and enters 10,000 in Mr. Soong's bank account. Presto, ten grand. It's good to be da Fed!

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