#44875
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L Tecolote
Survivalist
member8

“The Federal Reserve, a non-government entity, owns a large amount of the US debt.

How can that be? What did they use to pay for it, since they don’t print money?”

The corporate fedgov prints it for them, and sells it to them at cost (~&0.03/ note, irrespective of denomination.) They “pay for it” with a numerically appropriate computer entry on the fedgov’s account. That much, at least, is on the level, to the extent that the “money” they pay is “real.” But the bulk of the debt they own is “paid for” in interest-bearing loans of the same kind of “money,” equally as “valuable,” (because the governing corporation says so.) So why is the interest rate on current loans zero? Because the Fed needs a base of operation. If they raised the rate, everyone would understand that the corporate fedgov would be unable to pay, therefore, bancarota! If they had another well-armed base of operation, able to make everyone else pay up, they might try it. But where?

The power of the purse is always backed by the power of the sword, at least, until that sword proves unable or unwilling to do so. So the canny international banker makes loans to other states as well, expecting that whenever the wielder of the sword in question either refuses to pay up, or more likely, goes into competition by printing,or otherwise issuing, his own interest free “money” (e.g., Lincoln, Hitler, Kennedy, each to varying degrees) at least some of those other nations will, for reasons of their own, and with “generous” loans, arm themselves with the collective sword-power needed to bring the “outlaw” to heel.

Cry, "Treason!"

  • This reply was modified 3 years, 11 months ago by Profile photo of L Tecolote L Tecolote.
  • This reply was modified 3 years, 11 months ago by Profile photo of L Tecolote L Tecolote.
  • This reply was modified 3 years, 11 months ago by Profile photo of L Tecolote L Tecolote.
  • This reply was modified 3 years, 11 months ago by Profile photo of L Tecolote L Tecolote.