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Xinyuan Real Estate Co., Ltd. Message Board

  • walrathcrai walrathcrai Dec 13, 2012 7:18 PM Flag

    Monetary Policy

    It has become obvious that many people don't know anything about monetary policy. It is the job of the Federal Reserve to create money. Where do they get it?? They create it out of thin air. As much as they want. Since short term interest rates are near 0 the Fed has decided to create money by buying governmnet bonds.
    One of the problems is that while the Fed can create money they can't make sure it gets spent. That is why if want to stimulate the economy the government should increase spending by the amount of bonds the Fed buys. Next year we should increase spending by repairing roads, bridges and schools. We can also give money to state and local governmnets for the purpose of rehiring policemen, firemen and teachers. Combining fiscal and monetary policy is the way to go.

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