i keep hearing how the Federal Reserve “keeps providing stimulus to the markets”….how does it do that exactly?

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A question by Anonymous:  and how often? like today the stock market was really down, and then suddenly it is going back up again, and i have noticed this happen on a number of days that looked like they were going to be disasters, but i was wondering, why people just repeat like parrots “the Fed has investors backs”….what does that mean really? how do they do it? how often??

Answers

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By buying assets on the open market and adding the matching cash to the bank reserves of commercial banks, the Fed produces money. After that, banks continue to expand the amount of money in circulation by lending to individuals and companies. Today, the Fed uses its resources to regulate the money supply in order to support economic stability. The Fed boosts the money supply when the economy is in a slump to encourage growth. On the other hand, when inflation is a risk, the Fed lowers the risk by reducing the supply.

https://youtu.be/Ug_q97QKDjk

Vaor

It does that by printing more paper money and loaning it out to people. It provides a temporary stimulus in other words it fools people into believing that they are financially okay for a couple of more days but the truth is the truth we are so far in debt we are headed at great speed toward a collision with the ground! And there is no way to stop it! with every single stimulus and freebie that is giving out the entire United States accelerates the speed at which we are approaching a death collision. When they put out a freebie or a stimulus it makes everything okay for a few days. And then you’ll notice things go back to looking bad. so they throw out another freebie or another stimulus. And the time between looking good and going back to realizing you’re in trouble is shorter each and every time haven’t you noticed that.
The time is going to come very shortly when people wake up and realize my money is totally valueless! Haven’t you noticed that the price in McDonald’s and Burger King has risen by $2.50 in just the last couple of months. Haven’t you noticed that the price of silver has tripled in just the last couple of months that means that your American dollar has lost two-thirds of its value! We are a runaway train heading at breakneck speed to a death collision!.”

Matthew

“I agree with the matthew answer.. Much of the excess created out of thin air end money ends up in the US stock market. From countries around the world too.. Eventually this is going to bite everyone big time.. It’s a house of cardsi think the Fed is just letting its biggest member banks create money and invest directly into the stock market at their own whim.”

Frder
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