Stephen Burgoyne Coulson

Treasuries' True Risk

The accounting equation is inadequate to explain what's going on. While it is true that wealth cannot be borrowed into existence, buying power can. Borrowing money may create a counterbalancing debt but the debt is owed in the future and the money borrowed can be used to buy now so effectively money now is created by creating future debt (the debt exists now but is not due now).

Further, it is exactly this trick that the government is using to "create" the money. They give a promise to pay in the future to the Federal Reserve in exchange for cash now (which the Federal Reserve will create to counterbalance the debt offered).

Also, I was under the impression that the Federal Reserve is not an arm of the government but is actually privately held. Therefore the government still robs Peter (all the tax payers) to pay Paul (the owners of the Federal Reserve) which then lends it back to Peter so as to rob him a second time, with interest that cannot be paid because the money does not exist until the Federal Government issues more promises to the Federal Reserve so they will create the money to do so. The money supply under this system must always increase just to cover the interest ... until such time as the issuers of money chose to stop, at which point all the real wealth which underwrites the currency is forfeit to those who created the "money" in the first place.

Closer Look At The ARMs Reset Problem

Troubling enough of itself, but there is a whole house built on this foundation of cards.