by jessefelder
Eleven years in the past, shortly after the onset of QE 2, Ben Bernanke gave us his definition for “monetization” of the debt, telling Congress (hat tip, Grant’s):
Monetization would require a everlasting enhance within the cash provide to pay the federal government’s payments by way of cash creation. What we’re doing here’s a momentary measure which will likely be reversed, in order that on the finish of this course of, the cash provide will likely be normalized, the Fed’s stability sheet will likely be normalized and there will likely be no everlasting enhance, both in cash excellent or within the Fed’s stability sheet.
On the time, The Fed’s stability sheet was approaching $2.5 trillion. At this time, it stands at almost $9 trillion, greater than triple the determine from a decade in the past.
And so it solely appears truthful to ask, ‘Is it monetization but, Dr. Ben?’
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