Pretend money

The Federal Reserve bought $80 billion of Treasury bonds and $40 billion of mortgage-backed debt every month since June 2020 to help fund the $2.8 billion difference between how much the federal government spent over and above 2021’s fiscal year taxation.

In 2008, the Fed printed about a trillion dollars to minimize economic stress, doubling its balance sheet to more than $2 trillion. Since COVID, the U.S. central bank “created” more than $4.3 trillion to keep more people employed and to keep interest rates low. Other powerful central banks have and are acting in a similar fashion, ever expanding a global everything bubble. The Fed’s total assets are now $8.46 trillion after “buying” debt without anyone actually borrowing the money.

If price inflation is a function of an expanded money supply created by the Treasury and Fed as mandated by Congress and the president, both past and present Congresses and presidents are more than partially responsible for the increased prices inflicting hardship on our mid- to lower-income populations.

Historically, buying so much debt with pretend money has led to massive higher repricing of the cost of living. It’s been a fun ride for the top at the expense of everyone else.

George Hartzman

Greensboro

October 21, 2021