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Jerome Powell on How Money is Created

Summary:
Link to the tweet shown abovePelley: Fair to say you simply flooded the system with money?Powell: Yes. We did. That’s another way to think about it. We did. Pelley: Where does it come from? Do you just print it?Powell: We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds or other government guaranteed securities. And that actually increases the supply of money. We also print actual currency and we distribute that through the Federal Reserve Banks.

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Link to the tweet shown above

Pelley: Fair to say you simply flooded the system with money?

Powell: Yes. We did. That’s another way to think about it. We did.

Pelley: Where does it come from? Do you just print it?

Powell: We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds or other government guaranteed securities. And that actually increases the supply of money. We also print actual currency and we distribute that through the Federal Reserve Banks.

Miles Kimball
Miles Kimball is Professor of Economics and Survey Research at the University of Michigan. Politically, Miles is an independent who grew up in an apolitical family. He holds many strong opinions—open to revision in response to cogent arguments—that do not line up neatly with either the Republican or Democratic Party.

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