Global implications of this week's Fed meeting

Federal Reserve Chairman Ben Bernanke holds a press conference following a Federal Open Market Committee meeting at the Federal Reserve Bank headquarters December 12, 2012 in Washington, D.C.

The Fed begins its two-day meeting in Washington on Tuesday. Is this the week the tapering begins? Many on Wall Street are predicting the Federal Reserve will start to cut back on its bond-buying program. And what the Fed does here has a big impact overseas. James Knightley, senior international economist at ING in London, joins Marketplace Morning Report host David Brancaccio to discuss. 

Audio Extra: Still confused? Listen to Marketplace Morning Report host David Brancaccio explain how the Fed could orchestrate a reduction in economic stimulus. 

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David Brancaccio is the host of Marketplace Morning Report. Follow David on Twitter @DavidBrancaccio
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When the fed buys bonds and prints the money to pay for it, who is on the hook for the money that was printed? Does this method of buying and eventually selling those bonds affect the national debt? It would appear that it does. The Fed has been buying $85 billion dollars a month worth of government bonds. I'm assuming this means the $85 billion per month (over $1 trillion in a year), becomes part of the national debt twice. Once when the fed prints the money as if by magic. Then when the money gets spent by the federal government for interest on the debt, and other out of scope budget burdens.

Does the money that the fed buys the bonds with, have to be paid back, and if so, to who? What is the fed doing with all of its holdings (bonds, etc.)? Do they make a profit when they sell the bonds? And if so, where does that money go?

There are many questions about the Fed's activities, and how their actions ultimately affect us all. People need to start paying attention to how the Fed is operating.

We also need to understand the double edged sword of Freddy and Fannie.

And we need to pressure our representatives to support renewable energy initiatives.

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