Economics Questions

Re: Two questions regarding QE3

Awiz90 — Wed, 26 Sep 2012 21:34:37 GMT

Thanks for the vid, though it still didn't go over the full transaction process. Every source explains that the Fed will be issuing 'bonds' to banks that hold mortage debt, but the information goes no further. Who the Fed will be buying bonds from, and for how long they will be holding onto the debt? At what interest is this debt to be paid back? Does it even matter to the Fed if they never get paid back and just write it off? I mean, it's not like the money was ever really there in the first place so it's no loss to them.

Re: Two questions regarding QE3

Wheylous — Wed, 26 Sep 2012 20:55:15 GMT

My newb knowledge tells me it's buying mortgage-backed securities bought from banks. See Murphy on the issue:

(Please visit the site to view this media)

Two questions regarding QE3

Awiz90 — Wed, 26 Sep 2012 20:50:56 GMT

1. Who exactly will the money be lent to? Can anyone provide specific examples?

2. Are these bonds ever going to be paid back? If so, when?

Thanks!