Judy Johnstone
Verified User
They do print actual paper money. They also add additional money to the system electronically. This is known as the M1 value. Raising M1 is just stuffing empty dollars into the system. They do not sell or buy bonds. The treasury does that. The Fed can also order banks to increase or decrease reserve requirements. This is nothing to the money supply. They can also raise or lower prime interest rates (the rates the banks borrow money from the Fed at). This does not increase or decrease the money supply either. That is nothing more the imposing price controls.
66% of cash paper money is tied up in the illegal drug business at any given time.
