the bank doesn't need to have the money to pay you for the T-bill, as that money will be created and deposited into your account
Illya Gerasymchuk
the bank doesn't need to have the money to pay you for the T-bill, as that money will be created and deposited into your account
on the bank's sheet side it works: its assets and liabilities increase in the same amount
when a bank buys an asset from a non-bank it creates broad money
if a commercial bank buys a US Treasury bill from you, it will pay you by create a new deposit into your account
so effectively the bank pays you by creating new digital currency and crediting it into your account
