Re: Money supply and national debt -- need help on this subject


<darncat7@xxxxxxxxx> wrote in message
news:1145738962.546958.265000@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Bill,

I missed that part. Yes, the fed sets the target Fed funds rate,
not the yield of Treasury bonds. Thanks!


bonds are longer duration, so they are affected by other factors, but in
practice the fed ends up setting the rates for tbills. that is not the law,
but the empirical fact that arises from arbitrage.

the technical truth is that the fed pegs fed funds rate, and does not print
money at will. all it has to do to print money at will is to set the rate
way low.


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