Correct. Keep in mind that private banks ALSO create money whenever they lend money out too. Then the asset and the liability are both contained within the private sector.
In the absence of sufficient federal deficits that make their way spent into general circulation, the private sector is obliged to become perpetually more indebted to the banking subsector. Welcome to the last forty years.
Correct. Keep in mind that private banks ALSO create money whenever they lend money out too. Then the asset and the liability are both contained within the private sector.
In the absence of sufficient federal deficits that make their way spent into general circulation, the private sector is obliged to become perpetually more indebted to the banking subsector. Welcome to the last forty years.
I think that’s the M2 the question explicitely acknowledges. The Fed creates the M1 then the banks create M2 on top of that.