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by AC__
3847 days ago
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No the Federal Reserve issues USD, not the US government, most people don't realise this fact and it is the difference between a sovereign nation and whatever the fuck North American countries have become today. Canada, where I'm from, had control of our central banking authority up until 1974, what little sovereignty we had(we are still a constitutional monarchy) was relinquished to international banking interests. "Permit me to issue and control the money of a nation, and I care not who makes its laws!" - Mayer Amschel Rothschild |
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Secondly, the government creates dollars by spending -- when the US government spends, money is created. When the US government taxes, money is destroyed[1].
Same is true for the RBA in australia, it's even on their website[2]:
"As the Australian Government is a customer of the Reserve Bank, these payment flows can be very large. Expenditure by the Government adds ES funds to the account of the recipient (or their financial institution), while tax receipts have the opposite effect."
The US has several bizarre, self-imposed constraints like the "debt limit" and some crazy mechanism for the fed to buy treasury bills from the government that goes via the private banking system for no good reason but the net effect is the same. Government spending creates money and taxation destroys it.
In terms of ownership and control, the RBA is owned by the Commonwealth (probably the same for Canada) and the Fed is owned by private companies because of concerns about government control when it was setup (even though the Fed and the Treasury co-operate so much they might as well be the same institution) but ownership is very different from ownership of a normal company[3].
[1] http://www.mecpoc.org/2011/07/who-can-really-print-money-the...
[2] http://www.rba.gov.au/mkt-operations/dom-mkt-oper.html
[3] http://www.federalreserve.gov/faqs/about_14986.htm