>>19986894>>>>when a generation sells the futures of their country and their offspring for unsustainable and lavish wealth and their offspring are too stupid to realize it<<<---The NYFed’s primary dealers benefit from BOTH the liabilities and assets of the Federal Reserve’s balance sheet, the SOMA (System Open Market Account).
During QE, the NYFed creates reserves out of thin air and uses these reserves to purchase treasuries from its primary dealers (this is the asset side of the Fed’s balance sheet).
The primary dealers then earn interest on these reserves (called Interest on Reserve Balances, aka IORB) at the NYFed (this is the liabilities side of the Fed’s balance sheet). Pic related
We have devolved into a never-ending loop of newly-issued public debt and more taxes to pay its interest. This constant skimming is enabled and perpetuated by the NYFed b/c they create reserves OUT OF THIN AIR to purchase treasuries from a few select banks and then pay interest to the same few select banks on those very reserves. This is Quantitative Easing (aka QE).
The US is now issuing treasuries to pay interest on treasuries.
The Federal Reserve is now operating like a hedge fund, financing long term assets with short term liabilities.
http://www.nber.org/papers/w30749 