Debt Limit: a Guide to the National Debt as Household Income

Gwendolyn,

hugloans.com? Seriously? Well, the domain is for sale, if you want to buy it.

To answer your question, the debt ceiling is smoke and mirrors, because the debt owed to the
Federal Reserve private banks can never be repaid, regardless of what the deb ceiling is set to. It’s the
major flaw in the system, and the one almost everyone overlooks, or is not aware of. When the guv runs
out of fiat money, they borrow more from the Fed. The Fed actually has the U.S. Treasury print the Federal Reserve notes. The Treasury gives the Fed United States bonds, or other “collateral” in exchange for the
notes.

But, here is the fatal flaw. In simple terms, let’s say the the U.S. guv borrows 1 million Federal Reserve
notes. The notes are borrowed at interest. Let’s say it’s a simple 1% interest. So, the guv borrow 1 million,
but is required to repay 1 million and 10 thousand Federal Reserve notes (including the interest charged
on the loan). However, ONLY 1 million is created. The extra 10 thousand, which is required to repay the
loan IN FULL, is never created. So, the extra notes, which are required to PAY THE INTEREST on the
loan, is never, and HAS NEVER, been created. You cannot pay what does not exist. And what does not
exist cannot be put into general circulation.

The fatal flaw is magnified because commercial banks DO THE SAME THING. They create fiat “money”
out of think air, as a bookkeeping entry, and charge you interest on the loan. However, the extra fiat
“money”, which is REQUIRED to repay the loan, is NEVER CREATED.

A simple hat trick that not one in one hundred knows or understands.