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Links: Annotated (9.21.2009)

"Federal Reserve Accounts For 50% Of Q2 Treasury Purchases."  In a Ponzi Scheme, new investors invest money.  This new money is used to pay dividends to old investors.  Every Ponzi Scheme eventually fails, because you will always run out of new investors.  The United States Government, however, is able to print its own money.  This ensures a steady supply of new money.  Printing money leads to inflation.  To avoid inflation, the government has been selling dollars - called "United States Treasuries" to the Federal Reserve.  In other words, the Federal Reserve gives dollars to the U.S. government, so that the U.S. government can fund operations without increasing the money supply - which would cause inflation.  In exchange for the Federal Reserve's dollars, the U...continue to full post

Full post as published by Crime & Federalism on September 21, 2009 (boomark / email).