this link http://www.econbrowser.com/archives/2008/12/federal_reserve_1.html
states of the operation of the federal reserve -- "And how did your bank come to have those deposits with the Fed? These deposits are something the Fed has the power to create out of thin air. This indeed is its primary power-- the ability to create money. That's a power that could be easily abused, so our system is set up to prevent the Fed from creating deposits willy-nilly. Specifically, the traditional operation of the Federal Reserve was to purchase assets such as Treasury securities from a private dealer, paying for them by simply crediting the dealer's account with the Fed with new deposits. The Fed hasn't created any wealth with this transaction, it has simply introduced a new asset (ultimately, money) and retired an old (the Treasuries that were formerly held by a member of the public are now held by the Fed)."
and later says "historically there was really just one big story-- the Fed created deposits primarily by buying Treasury securities, and these ultimately ended up as cash held by the public."
perhaps this person is writing in a confusing way or i am confused....but i never thought the federal reserve was capable of creating wealth - or that creating wealth was ever in its charter. that just seems like an odd word use to describe the federal reserves operation of purchasing securities.
my first question...... the article says in one area that the federal reserve introduces new money only to retire Treasuries. does this imply no money inflation?
then of course they write the big story of " the Fed created deposits primarily by buying Treasury securities, and these ultimately ended up as cash held by the public."
if the federal reserve only makes a new asset to retire an old one how did the cash end up getting held by the public?
what took place that let the federal reserve buy (what i read to be) retiring assets and still create money inflation?