I must be going through a dense period, because for the life of me, I can't figure this one out.
Saying that the recession continues to deepen, the U.S. Federal Reserve announced Wednesday that it would pump an extra $1 trillion into the economy by buying mortgage-backed securities and long-term Treasury issues.
As expected, the Fed kept its benchmark interest rate virtually at zero. But in a surprise, it drastically increased the amount of money it will create out of thin air to thaw out the still-frozen credit markets that have cramped lending to consumers and businesses alike.
Interesting choice of words: "out of thin air"….
Considering we're presently more than $11 trillion dollars in debt, it's not like we can just toss in another "tril here, a tril there".
Thus the quiz question: Where is this money going to come from?
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