Quote Originally Posted by GoldenBoy812
No, the Fed has in theory, an unlimited supply of money at their disposal. It is their purchasing of securities (US debt) that allows them to add to the reserves of member banks. Of course, this does allow them to potentially purchase guaranteed assets (USTC) if reserve deposits get re-appropriated on to the balance sheet.

It has to say something about the overall strength of the dollar relative to other currencies, because when things started to get tough, the entire world began purchasing dollars which has made my trip to Rotterdam much cheaper! Look at how the dollar has killed other currencies these past two months.
Of course it has an unlimited supply of currency. However, we all know the only thing that gives our money value is how much of it is in circulation.

I wasn't talking about that practice. I'm talking about the interest we owe for every dollar in circulation (physical or electronic) to the Fed.

You know, the way every dollar is one dollar plus a prescribed percentage of interest.