I would really appreciate some advice on the Federal Reserve “Assets” and terminology.
What happens if the Fed lets its “Loans”(?) mature and not “roll them over”? Does the Fed then have to print money to pay for them? If it does then that money goes to the holders of the “Loans”, the creditors, and is now out in the market, so to speak. What’s the downside to letting the “loans” mature from an Austrian point of view?
If it continues to roll over the “loans”, how does that happen and what’s the potential downside?
The Fed considers these “Loans” to be Assets. Correct? And that they can sell these “Assets” later on. Are they worth the value they’re on the books for?
I understand they’re in a Catch 22 situation. I gather it’s because if they raise interest rates it will cause jitters in the market, and interest rates will increase and the deficit will go through the roof. And if they don’t raise interest rates, and they print more money QE, they will likely have to buy their own debt (monetise it) because no one else will likely want to lend America any money. So, either way the U.S. is stuffed. Correct?
You can see I’m a clutz when it comes to this sort of thing, but I’d really appreciate a layman’s guide if anyone would care to take the time in simple terms to explain.