Can someone explain how the Fed manage money? How does the goverment get trillions of dollars? (loan, credit)

[unseengundam]

I have always found the Federal Reverse system confusing. Does anyone have a simple explanation about they manage the US monetary system? How do they control money, inflation, etc?

Also, just how does the Fed and US government manage to get Trillions of Dollars to spend? Do they just print money out of thin air, like the rumor goes? Or is there some real systemic way money is created by the government to spend?

There is so many bad rumor about Fed and US government creating money, causing inflation, etc it hard to really figure what is going on. It would nice to hear what really is going on and sort all rumors US monetary system.

[HappyTexan]

Best explanation and history you'll ever get right here:

Amazon.com: The Creature from Jekyll Island : A Second Look at the Federal Reserve: G. Edward Griffin: Books

[Nor'Eastah]

I highly recommend HappyTexan's book, but it is a lonnnng read!

The quick and dirty: the government needs some $$$, say to fund the war in Iraq. After approval by Congress and signature by the Prez, it goes to the US Treasury. The Treasury Secretary authorizes that amount in US Treasury bonds. The T-bonds go to the Federal Reserve (a private, for-profit bank), in trade for the required funds, which do indeed come from "thin air". They either print it, or nowadays more likely just put in a computer entry.

What just happened? The private for-profit Federal Reserve just got perfectly good and valuable Treasuries, backed by the full faith and credit (e.g. you and me) of the US, in exchange for debt paper money. Those treasuries pay interest! The US Gov't pays the Fed INTEREST to borrow US money from them!

As I always say - good work if you can get it!

[gwynedd1]

Originally Posted by HappyTexan

Best explanation and history you'll ever get right here:

Amazon.com: The Creature from Jekyll Island : A Second Look at the Federal Reserve: G. Edward Griffin: Books

Great book. The only thing I disagreed with is about the Greenbacks.

[gwynedd1]

Originally Posted by Nor'Eastah

I highly recommend HappyTexan's book, but it is a lonnnng read!

The quick and dirty: the government needs some $$$, say to fund the war in Iraq. After approval by Congress and signature by the Prez, it goes to the US Treasury. The Treasury Secretary authorizes that amount in US Treasury bonds. The T-bonds go to the Federal Reserve (a private, for-profit bank), in trade for the required funds, which do indeed come from "thin air". They either print it, or nowadays more likely just put in a computer entry.

What just happened? The private for-profit Federal Reserve just got perfectly good and valuable Treasuries, backed by the full faith and credit (e.g. you and me) of the US, in exchange for debt paper money. Those treasuries pay interest! The US Gov't pays the Fed INTEREST to borrow US money from them!

As I always say - good work if you can get it!

Hi Nor'Eastah,

The money made in interest to the Fed is actually paid back to the Treasury. Its a great myth buster red herring for Fed cheer leaders. The real scam is when the commercial banks turn a $1 in to $10 loanable dollars and collect interest on that. It used to be a hazard for banks during banks runs when people would find out the money was not there. The only risk has now been sealed with the Federal Reserve and bailouts. The small newer competition dies and the old guard big boys get the bailout.

[bxlefty23]

Originally Posted by HappyTexan

Best explanation and history you'll ever get right here:

Amazon.com: The Creature from Jekyll Island : A Second Look at the Federal Reserve: G. Edward Griffin: Books

when i saw the title of the post i was going to post a link to this book
everyone should read it

[POhdNcrzy]

This should help:

Money As Debt