from Hacker News

It's All One Bubble

by devops000 on 1/28/25, 6:51 PM with 5 comments

• by cs702 on 1/28/25, 7:14 PM

  IRL, whenever anyone tells me that the Fed's "money printing" is "causing" this or that other thing, I always ask: "OK, tell me how the 'printed money' ends up in people's hands, and why and how it causes bubbles and inflation like you say." Typically, the response I get is a deer-in-the-headlights blank stare.

  In fact, the Fed cannot "print money." Only the US Treasury can, and it must first borrow the money or collect it in taxes. The Fed only buys/sells government/agency bonds in the open market, lends money to banks when those banks ask for it, and changes short-term rates.

  To paraphrase H. L. Mencken, all these "money printing" narratives that blame the Fed for some economic malaise are simple, appealing, and wrong.