The Money View: The New Federal Reserve

The video discusses the connection between war finance and the global financial crisis, focusing on the Federal Reserve's role. Initially, the Fed ensures the Treasury can sell its debt by buying treasury bills and creating money. During the global financial crisis, the Fed expanded its balance sheet by making loans to banks and broker dealers. As these loans were repaid, the Fed initiated quantitative easing (QE1 and QE2) by purchasing mortgage-backed securities and treasury bonds, maintaining liquidity in the financial system.

What role does the Federal Reserve play in war finance?

How did the Federal Reserve respond to the financial crisis after September 2008?

Explain the significance of purchasing mortgage-backed securities during the financial crisis.

What is meant by 'QE' in the context of the Federal Reserve's actions?

What is the connection between treasury bills and the actions of the Federal Reserve?