....................................My daughter Glenda..................................
..........................My son Paul and my Grandson Ryan....................
Money does not exist as a thing. It is only an entry in a Bank account. If you have a Bank account that credits you with $100 and you ask them to give it to you, they can't. There is no real thing that is money.
Instead They will give you a Federal Reserve Note and erase $100 from your account That means that now the Federal Reserve Bank owes you $100. The Note says that the Treasury of the United States has ordered that this Note
[Reserve Bank Debt|] can be used as Legal Tender to pay "for all Debts, public and private.
You then go to Big Box Market and buy some stuff. The Big Box Market says you owe them a $100. Since you don't have $100 you give Big Box Market the Federal Reserve Note. Now the Federal Reserve Bank owes the Big Box Market $100 Big Box Market takes the Federal Reserve Note to the Bank and the Bank puts it in their vault and credits the account of the Big Box Store with $100 in money.
The reason these notes exist is because their are people who do not want to move their money from their account to another by electronic transfer or by writing a person check that orders the Bank to do this. In stead they want to use a Universal IOU and that is what a Federal Reserve Note is.
The Banks buy them from the Federal Reserve Banks who bought them from the Treasury who printed them , just as Treasury make coins and sell them to the Federal Reserve Bank. The Fed pays face value for the Coins and the Government earns a profit. The Federal Reserve only pays cost of printing for the Notes and the Fed Banks make a profit when they sell them to Corporate Banks. The Corporate Banks use them as a service to customers.. It represents only a tiny fraction of the money that is written into the Banks Accounts.
The final question must be, why do people use them if the Banks can never give them Money. Remember, money does not exist as a thing. The reason is that Government has the constitutional right to create money. It also has the right to charge you taxes. If you owe the Government $100 in taxes, you cannot pay it with labor or chickens or corn or gold. You can only pay it with money.
If you refuse to pay your taxes you will go to prison. If you don't want to go to prison you had better trade your labor or chickens or corn or gold for money. Only money has any value when you owe the government a tax debt. Now you know why all money is just a way to pay debt. Money = Debt
This was first written as a Note in my Facebook community page
Pax Village Voice
Copyright © William Hodge 2012