Ε.Α.Μ-Ε.Λ.Α.Σ.
1.1K posts
TRUMP ADMITS AMERICANS ARE PIRATES “It’s a very profitable business. We’re like pirates.”
I’ve been seeing more comments here lately about “Stealth QE.” Let’s dispel some myths: Yes, M2 is rising, but no, the Fed is not doing QE. There are a few reasons why M2 is currently rising. 👇🏼 First, now that QT ended in December, the Fed is reinvesting MBS, Bills, Notes and Bonds back into Treasuries as they mature. They call this “Reserve Management Purchases” or RMPs. Second, the U.S. government has been borrowing heavily from foreigners via Treasury securities sales, with foreign holdings hitting records in 2025 and early 2026 (around $9.5 trillion). This inflow of foreign capital helps finance large deficits, and when the Treasury spends those funds domestically, it directly boosts bank deposits and other M2 components in the U.S. banking system. This adds net new dollars to the domestic system without reducing U.S. residents’ liquidity. It also helps fund the fiscal deficit (which itself expands M2 through spending) while supporting the U.S. current account deficit. Finally, the continuation of massive deficit spending increases M2 regardless of the buyer. The government borrowing/spending dynamic expands deposits either way. It’s true that domestic buyers have absorbed the majority of new issuance as the foreign share of total publicly held debt has actually declined slightly to 30%, but that’s because total debt is growing so fast.
🧾 @EMaggiori_ : "MMT was born out of an accounting mistake — they thought whenever the government collects taxes, the money disappears. They literally destroy the money." Emmanuel Maggiori exposes the error at the heart of Modern Monetary Theory. 👇
What if the markets (instead of the Fed) set interest rates (the price of money)? Would we care who Chairs the Fed? Would we care whether he or she is "independent" or not? Would we care about his or her forecasts, views on the economy, favorites in an election, blah blah blah? Imagine how productive we could be with our time otherwise! What if there were no Fed, or it were at least reduced back to being a lender of last resort only, at a penalty rate of interest, on good collateral only? There are 350 million vibrant people making markets in this country every day. Why not let them decide the price of money?
