econ T-bonds, profit, loss, premium?
julie asked: # If you buy a put option on a $1000,0000 Treasury bond futures contract with an exercise price of 95 and the price of the Treasury bond is 120 at expiriation, is the contract in the money, out of the money, or at the money? What is your profit or loss on the [...]
How is new currency injected into circulation?
Currency E asked: Say the central bank (fed) decides to add more currencies to the economy. How is it injected into circulation? I thought about Fed go buying bonds from the market with the new currency. But then how does Fed control the interest rate effect of the purchase? For example, Fed wants to add [...]
Is it true that every U.S. dollar is loaned into circulation as debt, creating principal but not interest?
oianzinho asked: …and therefore totally unpayable?
I asked something similar earlier but didn’t get an answer to my satisfaction.
I understand that the privately owned (though govt chartered) Federal Reserve buys treasury bonds with money it issues from nothing, and that the interest the U.S. owes on the bonds the Fed holds can only be paid by [...]