So, the private banking sector was totally devoid of money, then the government created money to recapitalize it, and then the banking sector “paid back” the money created, $29 Trillion, except for a bit under $500 billion? How much of that repayment was from interest payments on Treasury bonds? How much was simply slight of hand movement of risky assets to the Fed where they could be absorbed via its shared balance sheet with Treasury?

Any dollar-denominated assets that enter the government sector are deleted by the debt, which is handy if one needs to offload liabilities masked as payments. That shared balance sheet is how the Fed is always the gorilla in the room in moving interest rates, as it can purchase Treasury bonds at essentially no cost. It is just as capable of purchasing other non-cash assets and making them disappear. Blankfein and his cronies “paid for” most of the loans with the same junk assets that caused the meltdown.