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<p>[QUOTE=&quot;Veritas, post: 234309, member: 7453&quot;]The US Federal Reserve attempts to control inflation through the setting of the federal funds rate and open market operations.&nbsp; </p><p><br /></p><p>In an inflationary environment, the Fed raises the federal funds rate, borrowing becomes more expensive and in aggregate, any given dollar is circulated less, ceteris paribus.&nbsp; This has the impact of reducing inflation.</p><p><br /></p><p>In a deflationary environment or when the economy is doing very poorly, the Fed would consider reducing the federal funds rate.</p><p><br /></p><p>In open market operations, the Fed buys / sells US treasury bills, notes and bonds, thereby impacting the interest rate of these instruments.</p><p><br /></p><p>As for the original poster&#039;s comment on whether or not minting many coins could increase inflation, my answer is that the amount of money we are talking about here is relatively small.&nbsp; Secondly, many of these coins are not re-circulated.&nbsp; Thirdly, just by the virtue of the availability of these coins, money has not becoming &quot;cheaper&quot; and so demand for money has not increased.&nbsp; Therefore, over all, the minting of the statehood quarters should not be inflationary.[/QUOTE]</p><p><br /></p>

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