General Discussion
In reply to the discussion: A question for Obama and\or his supporters here: [View all]coalition_unwilling
(14,180 posts)Last edited Fri May 25, 2012, 11:43 PM - Edit history (1)
there are a couple immediate remedies that come to mind:
1) raise the insurance premiums all banks pay to the FDIC
2) increase appropriations to fully fund the FDIC
BTW, the FED does not create money with "mouse clicks." It creates money by buying Treasuries on the open market. When the Fed purchases a Treasury, the bank selling it surrenders said Treasury and, in return, receives a $ credit on its balance sheet. Those $ credits are money created out of thin air by the Fed, if you will, but there is a Treasury (an asset) offered in exchange.
In a larger sense, money is created when banks loan money to businesses and consumers. I'll be happy to explain how that works if it's not clear.