| Is it true that every U.S. dollar is loaned into circulation as debt, creating principal but not interest?

Is it true that every U.S. dollar is loaned into circulation as debt, creating principal but not interest?

oianzinho asked:


…and therefore totally unpayable?
I asked something similar earlier but didn’t get an answer to my satisfaction.

I understand that the privately owned (though govt chartered) Federal Reserve buys treasury bonds with money it issues from nothing, and that the interest the U.S. owes on the bonds the Fed holds can only be paid by selling the Fed more bonds, creating an insatiable feedback loop of national debt — which the taxpayers must try to pay in vain, much like trying to pay off a credit card with the same card.
(When I say “privately owned” I refer to the private stockholding banks that take the Fed’s profits, not to the board appointed by the President which seems more like a go-between for the stockholders and the Gov)
That does sound too insidious to be true. Is it?

Also the last answer said that when local banks issue loans, they don’t create money but the process of issuing the loan creates money. That difference seems nominal at best and misleading at worst, like saying cars and not drivers run people over. How does a bank create money out of nothing and charge me interest on it, and confiscate my collateral at the barrel of the law’s gun should I default?

That ALSO sounds too insidious to be true. Is it?
And, of course, either way: prove it!

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One Response to “Is it true that every U.S. dollar is loaned into circulation as debt, creating principal but not interest?”

  1. ஐ♥ 3Kids 2hearts 1dream ♥ஐ on May 28th, 2009 11:38 am

    I will be honest….I only read 1/2 your post prior to responding.

    The way I understand it is that the U.S is making (for all intensive purposes) IOU money, that they are banking on CHINA (of all places haha) to re-imberse them for IF and WHEN they get their finances back in order.)

    I’ve researched this extensively, and at least 7.5 BILLION dollars is on that exact system…as for the rest, I have no clue nor interest…..that was enough to make me sick.