Since nixon's evaporation of the gold standard, the US currency has been backed by little more than confidence. Confidence in the people's lack of understanding of the monetary system that is. The federal reserve is not federal, it is privately owned.
They can lend multiples of what exists in reserves, under fractional reserve banking. They control the amount of money in circulation, which comes in to existence through loans made to banks and governments. Since the money comes into existence through debt it has to be repaid, but with interest. Therefore the debt is larger than the money supply and inflation, along with defaults and bankruptcy, become permanent problems
Throwing gas on political firestorms! Articles, Discussions and News on voting. Raising questions on Democratic and Republican policies and inaction on capitol hill and the United States of America.
No comments :
Post a Comment