The FED can buy bonds in an auction at will. Because it prints the money to do so. It's not like the FED goes "Uh oh, those bonds are too expensive for me".
Re:How This Ends
by senthil_rajasek on Sunday May 22, 2022 @01:06PM
(#31470373)
It's a recent phenomenon. During the covid crisis the fed became a buyer of last resort. It's not usual.
Maybe it's the new normal?
Just like doubling the money supply every couple of years seems to be the new normal since it started in 2008?
Re:How This Ends
by senthil_rajasek on Sunday May 22, 2022 @01:26PM
(#31470577)
Maybe, but it's not normal today.
No asset is risk free. Bonds are a relatively less risky asset.
>The government constantly raises and lowers that scarcity at will.
Nope. Notes, Bills, Bonds are auctioned.