Fed to Pump another $1 Trillion into Economy
Mar 19, 2009
Last evening on the McNeil-Lehrer News Hour, I watched an interview with Greg Ip that really surprised me. I had heard,of course, that the Fed had decided to "buy bonds" worth a trillion dollars and figured that this meant they were going to create a trillion dollars out of thin air. But I never thought that the independence of the Fed would be brought out so clearly in this interview. . . .
Fed buys Treasury bonds
RAY SUAREZ: Help us understand what it means for the Fed to buy Treasury bonds. Isn't that like putting your hand in your left pocket and just shifting the money to your right pocket?
GREG IP: Well, step back a second and ask, what is a Treasury bond? It's essentially one of the ways that the government finances itself. When they want to provide us with services, whether it's Social Security checks or funding the Department of Defense, they can either raise taxes, they can borrow the money from households or from foreign investors, or they can ask the Fed to print it.
And when the Fed purchases bonds from the Treasury, they are basically printing money. They say, "We'll take that bond," and hey, presto, we will create this money in an account for the government to spend.
RAY SUAREZ: So the Fed creates the money and then just lends it to the Treasury?
GREG IP: That's exactly what happens, and the Treasury goes out, and they spend the money. Now, in this case, they did not directly give the money to the Treasury. They actually will purchase the bonds on the open market. They will purchase them from people who previously bought them from the Treasury, but it is, essentially, printing money.
THE TRANSCRIPT OF THE FULL INTERVIEW IS AT:
The Fed creates money and loans it to the Treasury. The Treasury takes this newly-created money in exchange for bonds (debt notes) and then spends it. If the government can create a bond, it can create its own money WITHOUT having to borrow it at interest. There is no reason the government should have to borrow its money from the Fed. There is no reason why the Fed should be an "independent" (private) banking institution.
This is the root of the problem with Mystery Babylon, which took its modern form in 1913-14, precisely 2,520 years after the original Babylon Empire was formed in 607 B.C.
We should be using U.S. Notes, not Federal Reserve Notes. But the last one to try that was President Kennedy. He was killed two weeks later. Every president since then knows better than to try that again. So God is now intervening to bring down that corrupt house of cards.
Dr. Stephen Jones