--- markjohn™ <[EMAIL PROTECTED]> wrote: > Could you please describe in layman's how does fiat money work?
Fiat lux means "let there be light" Fiat money means, "let there be money." In the US, the Federal Reserve system (central bank) issues money by increasing bank reserves (deposits), which is further expanded by bank lending, thus determining the money supply, along with the velocity of circulation. Specifically, in effect, the FED's Open Market Committee buys US Treasury bonds in the market. The buyer deposits the FED check into his bank, and his bank then deposits the FED check into its account with the regional Federal Reserve Bank. The FED bank covers the check by increasing the private bank's reserves (deposits). That is how the FED explands money out of nothing. Fred Foldvary Fred Foldvary ===== [EMAIL PROTECTED] __________________________________________________ Do You Yahoo!? Sign up for SBC Yahoo! Dial - First Month Free http://sbc.yahoo.com
