The Federal Reserve – The Untold Story
by Keith Sharp
People need to know this one, very important fact about the Federal Reserve: when Uncle Sam borrows from the Fed, it’s not like there’s a vault of money they go into, and cart out oodles and gobs of cash.
No, what happens is, an accounting entry is made, and upon the Fed’s issuing of the check, Presto! Debt is created.
Think about that for a moment. Many people realize this is how money enters the economy from the Fed. But most don’t realize one very important aspect: the Fed doesn’t risk anything. It has no skin in the game. And since it’s lending money that formerly did not exist, it is lending out a fiction!
If the Fed has no skin in the game – no assetts at risk – it is lending nothing. And if it’s lending nothing, that means the so-called debt is nothing. Further, if it’s a fictional debt, why the need to raise real taxes to repay it? In fact, what is the point of taxation at all?