Re: Could Someone Please Explain the Money Supply?
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When they sell the bonds back and the money comes back to the Fed, voila, the Fed just made its own money back for virtually no cost.
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Actually it gets it back, and more. From what i understand the Fed collects the interest on the bonds it holds, something like 50 billion a year (since its a not for profit anything not spent on offices and salaries is "returned" to the government.
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