I am beside myself with admiration for my recent idea–a way to create perpetual wealth without effort. Normally, one must be humble when involved with markets. However, who will have the fatal conceit to deny my brilliance?
The Federal Reserve can finance the consumption of all Americans’ wants through bond purchases with money created from a computer keystroke. The Fed, in turn, could sell those bonds to banks. Since the U.S. Dollar is the world’s reserve currency, Americans can buy from foreign suppliers who then can invest in our government debt. As Americans buy ever more goods, since everything would be free, our trading partners would take the Fed’s money and buy more U.S. government debt. More bond buying lowers interest rates–creating more profits from buying bonds–a perpetual benign circle of growth and wealth.
Say Americans want free gasoline. Let’s create a paradise. A government agency can buy gasoline from foreign suppliers at market prices and then sell to the consumer at $0.00 per gallon. This “gift” or subsidy–rather than tax the populace–the government issues gasoline bonds which the Fed purchases. In turn, the Fed just creates the money through a computer key stroke saving precious paper and cloth. The Fed can choose to hold these bonds or sell them to others. I estimate that the Fed could easily buy two trillion dollars of bonds PER MONTH to finance a doubling of America’s economy. Let’s go from a $11 trillion economy to $22 trillion.
Demand would explode causing foreign economies to boom. With the world economy growing wars would become obsolete. Foreign aid redundant. Americans could just consume.
Why hasn’t another thought of this? Do you think because of ignorance, sloth or stupidity? Do you think my Nobel Peace Prize is assured?
For anyone rash enough to criticize, can you compare and contrast my plan with the Fed’s current operations?
Your thoughts welcome!
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