The Fed is Paying Too-Big-To-Fail Banks to Fund Govt Deficits with its Newly-Printed Dollars

What happened to those trillions of dollars the Federal Reserve printed during the financial crisis? Why aren’t they causing mass inflation? Robert Murphy of has an answer. Banks are using them to buy US government bonds. Gonzalo Lira explains this in Stealth Monetization. Has the federal state captured the printing presses? It seems that way.

But Murphy and Lira argue that it’s happening under the radar. The Fed gives freshly-printed money to the banks. The banks turn around and buy government bonds. In this way, the Federal Reserve is printing dollars to pay for the enormous federal government shortfalls. Banks profit because they get the funds at a 0.25% interest rate. That’s less than inflation. Small businesses can’t compete with this arrangement. That may be one reason they aren’t getting loans, if that claim is even true. These shortfalls pay for the wars, the police state, the war on our food and other encroachments on our lives, liberties and properties.

Don’t know Federal Reserve from Federal Express? Check out this video.

By George Donnelly

I'm building a tribe of radical libertarians to voluntarize the world by 2064. Join me.

2 replies on “The Fed is Paying Too-Big-To-Fail Banks to Fund Govt Deficits with its Newly-Printed Dollars”

What a sad state of affairs this country is dealing with, my friend. With the size and scope of the federal government expanding everyday, sticking its nose into the private affairs of citizens and wrestling control of the economy piece by piece we’re in big trouble. The Obama administration won’t quit until they’ve realized their goal of a socialist utopia where they have absolute control over society! Sadly the Constitution doesn’t mean anything anymore to the power players in Washington and our liberty and freedom is going down the drain quicker than anyone realizes – much longer and they’ll be gone.

Glad to see another blogger with some ideals that make sense…

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