Fed or central banks cannot really print money, but it can control the reserve requirements of banks, but it has no control over loan given to the private sectors.
1. Fed can do bailouts, i.e. buying toxic assets from banks, so its reserve remain afloat.
2. Fed can buy bonds issued by banks, in turn become its assets and increase its reserve and hence can have more capacity to lend out.
Hence, money can be loan out to customers when reserve is improved. However, if the private sector is over geared, hence, there will not be many takers. Therefore, the access cash will goes back into reserve. Some are use to get higher yield assets, therefore inflating other assets along the line.
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