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Reply #18: Another problem people don't get. The trillions in loans don't exist as taxpayer money. [View All]

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banned from Kos Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-29-11 08:47 PM
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18. Another problem people don't get. The trillions in loans don't exist as taxpayer money.
Bank ABC needs a $50 billion loan - the Fed just creates the money temporarily, say for 60 days. Bank ABC repays $50 billion plus about $800,000 interest. The Fed "destroys" the $50 billion principal and pays the Treasury $800,000.


This process INFURIATES goldbugs (including the ones here).
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