Robert Thomas
Well-Known Member
I have been trying to understand this for some time, so tell me if I'm wrong.
The FED (a private organization made up of who knows who) decides that the Treasury or the private sector needs 1 dollar). So the Fed tells the Treasury to print a "1 dollar note" that pays 5% and is due in one year. The Fed takes this note to the bank and says give them me a dollar for this note. The bank takes the note and gives the Fed one dollar, then the Fed gives the dollar to the Treasury so spend. In one year the Treasury owes the bank $1.05 which it no longer has. So the Treasury tell the Fed we need a $1.05 to pay a dept and we don't have the money. So the Fed tells the treasury to print a $1.05 note and the process starts all over again.
Or if the Fed wants the money to be put into the economy without congress getting involved it just goes to the bank and does the same thing as the Treasury. It gives the bank a note and takes bad debt from the bank, the bank then has money to lend.
The FED (a private organization made up of who knows who) decides that the Treasury or the private sector needs 1 dollar). So the Fed tells the Treasury to print a "1 dollar note" that pays 5% and is due in one year. The Fed takes this note to the bank and says give them me a dollar for this note. The bank takes the note and gives the Fed one dollar, then the Fed gives the dollar to the Treasury so spend. In one year the Treasury owes the bank $1.05 which it no longer has. So the Treasury tell the Fed we need a $1.05 to pay a dept and we don't have the money. So the Fed tells the treasury to print a $1.05 note and the process starts all over again.
Or if the Fed wants the money to be put into the economy without congress getting involved it just goes to the bank and does the same thing as the Treasury. It gives the bank a note and takes bad debt from the bank, the bank then has money to lend.
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