Friday, October 23, 2009

Seeking out more money...


Think about the income you make. Dream about how much money constitutes "a lot." In your mind, is a lot of money in the thousands? millions? billions? maybe even trillions?

Now lets switch into a fantasy thinking mode.

Wouldn't it be nice to print and spend money as you pleased? For sure! That must be a fantasy, right? Not entirely. For regular common Americans, if we printed more money, that would equal major jail time. So yeah, print and spend would not workout for the common American. However, what if you are the government; can you print and spend money as you please? In a round about way, yes. The U.S. Government does it all the time.

Here is a interesting excerpt from a hhn.us article, "When the Fed wants to raise money for the government it sells government bonds. The more bonds it sells the more money it raises. As long as there are buyers the government can raise as much money as it needs. If the buyers grow skittish the government can raise the yield on the bonds to make them more attractive. Most of the time the Treasury sells bonds either to private investors of governments like China. But it can also sell them to the Federal Reserve. When the Fed buys bonds it can pay for them simply by printing money."



Chew on this for a while. Think before you vote again.

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