this post was submitted on 20 Mar 2026
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Explain Like I'm Five
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Interest rate manipulation is one lever the government and the treasury has.
Another way you do that is with treasury bills. It's easier for me to think of it how it works from the point of view of an investor. Do they get cash? Then the investor sold a treasury bill back to the treasury and increased the general money supply/the government buys treasury bills. To decrease the money supply, the investor buys treasury bills/the government sells treasury bills. This happens electronically nowadays, so no actual cash needs to be printed.
The actual amount of specie (cold hard cash) that is needed doesn't necessarily reflect the amount of cash (cash and cash equivalents. Yeah, I know) in an economy anymore