Forget The Fed & Jackson Hole: Treasury Is About To Unleash $500 Billion Quantitative Tightening

so when you bank money, that becomes the banks liability ,thats what banks used to do

so the money you bank can be used to create more money ,


'We have a two tiered monetary system, where one type of money is used when transacting with the Fed and between commercial banks (reserves), and another type of money is use when transacting with everyone else (bank deposits). This note explains the two types of money, and how they interact with each other.'

The cash that treasury holds is already swishing about in the economy. To spend it, they have to withdraw it.

Its not as if they hold the "cash" in a vault along with madam's jewelry.

Just the same as the cash that you hold in your bank account is being used by someone - its what banks do. Until you withdraw it. Just like Treasury does.

Normal times are mentioned, when treasury would borrow to spend, and this would withdraw money from someone else - zero sum, but this is "different".

I say that is incorrect because it is still withdrawing - its own funds from the economy rather than someone elses from the economy.

Its called fiscal policy.

Only the Fed does monetary policy and QE, which is fiddling with the books to create liquidity out of nothing for banks.

hm, quietly they started

Tapering is coming.