So when the fed sells a security does the money destroyed exactly equal the money it originally created when it bought the security? Not if the bank that bought the security lent out the money from the fed. The magic of the fractional reserve banking system multiplied the money from the original security multiple times over. I don't think this article addresses this fact.
Fed creates $100 by buying a security X.
Bank gets $100, lends it out, earns $5 in interest, has $105.
Fed sells the security, destroying the $100.
The Fed created $100 then destroyed $100. The $5 used to pay the interest on the security wasn't created as a result of the Fed's buying the security, it was paid with money already in the system.
