Did the Fed Create Cash or Debt with QE?

by Martin Armstrong
Armstrong Economics

QUESTION: Mr. Armstrong; some people say you are wrong because the Fed did not create “cash,” but rather made more debt available through the QE process and whether people hoard money is irrelevant. I do not agree with this statement for the Fed clearly bought bonds, they did not create debt. It seems some people have completely got this all confused. Can you clarify this.


ANSWER: This is a very strange question. I really do not know how in the world someone can say the Fed did not create cash but debt. The entire theory of QE was to increase the money supply in circulation by purchasing government bonds.

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