Americans Are Putting Billions More Than Usual in Their 401(k)s

Re:Americans Are Putting Billions More Than Usual in Their 4... by portent on Thursday January 05, 2017 @05:05PM (#13331863)

I don't think that is right.

The federal reserve can create new US dollars, and it can buy US Treasuries - but this is not the same as redeeming them. The fed becomes just another bondholder that needs paying by the treasury dept. The money goes to the person who previously held the bond as payment for the bond.

Also there is about $20 trillion outstanding public debt, and only $3.3 trillion in the whole money supply, so there is a big gap in money creation needed to pay off the debt. Would tank the currency and kill the economy (think hyperinflation).

https://www.treasurydirect.gov/NP/debt/current

http://www.tradingeconomics.com/united-states/money-supply-m...

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Re:Americans Are Putting Billions More Than Usual in Their 4... by hx87 on Thursday January 05, 2017 @05:32PM (#13332064)

> The fed becomes just another bondholder that needs paying by the treasury dept.

The Fed does not get paid. It doesn't need to get paid, since the Federal Reserve by law has infinite liquidity.

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Re:Americans Are Putting Billions More Than Usual in Their 4... by portent on Thursday January 05, 2017 @06:22PM (#13332436)

all bondholders are paid - it doesn't matter who owns the bond.

https://www.quora.com/What-happens-to-all-the-bonds-that-the...

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