How the US creates money

HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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bravekind

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How the US creates money

posted on Dec 12, 2007 12:27PM

How funny money is created.

The gov't prints treasury bonds.
The gov't sells those bonds to the Fed (Privately held coorporation acting as a agency of the gov't)
How does the Fed pay for the bonds? From nowhere - they make a bookeeping entry.
The money, created from nowhere, is delivered to the Gov't.
The gov't spends the money.
The gov't pays the Fed interest on the bonds!

When the Fed wants to increase the money supply:

It buys bonds from the banks, paying for it with a bookeeping entry.
The banks lend this money out.

Remember the Wendy's ad 'Where's the beef?' we should ask 'Where's the gold?'

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Source: Summarized from page 10 of the Long Wave Analyst. Aug-Nov edition.

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