On Aug 16, 2007, at 5:51 PM, Mike Ballard wrote:
> So, the private banks issue
> these bonds and the a central bank buys them with freshly printed
> paper?
No, they're bonds issued by other entities, particularly the U.S. Treasury, that banks are holding. For, example, U.S. banks have about $8.6 trillion in assets, of which $1.2 trillion are U.S. Treasury and agency securities.
Doug