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Federal Reserve Riddle: How did they earn $2 trillion?
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Original Message
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Riddle:
A U.S. citizen who worked hard for 15 years or 20 years full time and worked simply to save, say, $100,000 in short term and long term U.S. treasuries for a modest retirement. This might be a money market account or some other funds that invests the money in U.S. Treasuries.
Then, this citizen takes a hard look at the Federal Reserve, which is actually a consortium of privately owned banks.
When the Federal Reserve needs more money, they call the U.S. treasury and order them to engrave $85 billion this month in U.S. dollars, or print them digitally. They then turn around and with this $85 billion they buy U.S. Treasuries and sit on them. They do this until they have accumulated $2 trillion in U.S. treasuries, which is on the Federal Reserve’s balance sheet right now.
Riddle: How much more work did the owners of the Federal Reserve bank do to earn their $2 trillion, than the private U.S. citizen did to earn $100,000 of these risk free notes?
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