Finally, here comes episode 6 of the 666cast. It’s the infamous episode about the Federal Reserve and will hopefully get you thinking about how our money works (or if). The one thing I forgot to mention in the ‘cast was my debunking of the idea that money from the Fed comes from investors. That’s the standard excuse. You invest money in the Fed and then they loan money to banks and the US Treasury. But think about it for a moment—how can the source of all money be somehow supplied with money? Doesn’t it turn into a giant game of mirrors at that point?
You get paid by your employer who took out a loan from the bank to pay you. His bank took out a loan from the Federal Reserve. The Federal Reserve got money from you, who invest your money in the Fed. You get paid by your employer and…
Does that make any sense at all? I don’t think so. Especially when our economy is so flippin’ huge, there’s no way that would work.
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