Money creation

Doug Henwood dhenwood at panix.com
Mon Apr 10 06:13:24 PDT 2000


Enrique Diaz-Alvarez wrote:


>In any case, it seems to me that the difference between creating money and
>creating money in $250 increments only is a fairly minor detail, don't you
>think?

How do MM funds create money? You deposit $1,000, the fund buys commercial paper and CDs and T-bills. The issuers of those instruments either invest it in real activity or re-lend it to someone who might. Where's the ex nihilo part?

Doug



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