$250 billion, $2.5 trillion, Monopoly money?

[touchring]

Since the start of the month, we've been hearing astronomical bailout figures, such as the 2.5 trillion dollars from the EU to bailout the banking system.

My question is, where does the money come from? Are these monopoly money? If yes, then we're in big trouble.

[phirang]

Re: $250 billion, $2.5 trillion, Monopoly money?

reserves, both cash and gold.

[metalman]

Re: $250 billion, $2.5 trillion, Monopoly money?

reserves, both cash and gold.

as greenspam said "the fed can expand its balance sheet infinately'. that was ej's whole beef with the deflationists.

but there's no free lunch. markets are bidding down long bonds on the expectation that today's massive liquidity injections are tomorrow's high inflation. the 10yr is tumbling...