Far too many Americans are not concerned about Federal Reserve activity. They ought to be because it affects their pocketbook and those of their children and descendants.
A lesson: When the Fed buys bonds it creates reserves for the banking system, which, in effect, creates paper money or credit. When times are bad and business has no full use for that credit, the Fed’s action is useless. But once a recovery takes place, all that paper money that’s been created, translates into inflation.
When the Federal Reserve sells bonds it tightens the money supply but once the barn door has been opened, the escaped horses of inflation have taken over the economy. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)
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