By James Caton, includes “… The new option made available by the Federal Reserve allows these banks to instead earn a risk-free rate of return. It would not be incorrect to imagine the Federal Reserve printing money and simply handing it to these banks in exchange for their agreeing not to lend the new money. … President Trump has reason to be quite vocal about Jerome Powell’s historical unwillingness to ease monetary policy substantially. … The greater the unwinding of the balance sheet, the greater will be the difficulty of servicing federal debt. This problem is on the horizon. It will be met by a combination of dollar devaluation, reduction of the budget, or default.”
Read the full article on: American Institute for Economic Research