* By law, the Fed must follow the Treasury’s instructions even if it disagrees with them
* fed is responsible to set interest rate
* Fed is “Fed Reserve Bank” and can buy any stock or any currency — open market operations
Federal Reserve Bank can purchase through its open market operation $10 million worth of Microsoft stock. The bank pays for this
stock with its own check, a Fed check or its electronic equivalent. [The Fed check is created from thin air, there are no funds
backing this check. No funds!] The Fed check is deposited, by the stock seller, into a local bank. It is then returned to the
Federal Reserve Bank where the check is cleared and the local bank is given full credit for this deposit.