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Iowa | Money is also created when the government runs deficits and the bonds are bought by the fed (which happens frequently). Fed calls up treasury "create x $'s to buy bonds" they then buy treasury bonds with the money. Now they say they're gonna exit that market, but uncle sam is daring them to. If they really stick to their guns, the government bond rates may just raise faster than what the fed had initially planned. Interesting thing is the chinese are cutting their rate, because their housing bubble is deflating. | |
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Increasing interest rate to stop inflation????
