Guest Post: Think Those Are Dollars In Your Wallet? Think Again!
by Simon Black
Here’s a question– if you’re in the Land of the Free, do you think those green pieces of paper in your wallet are dollars? They’re not. Those green pieces of paper are Federal Reserve notes. “Notes” in this case meaning liabilities to the central bank of the United States. That makes you, me, and anyone else holding those green pieces of paper essentially creditors of the Federal Reserve, whether we signed up for it or not. And at this point, thanks to a long-standing policy of wanton money printing, the Fed has more liabilities than ever before in its history. By an enormous margin. Given that the Fed’s assets are so closely tied to the finances of the US government, the outlook should concern independent, thinking people. The US, Japan, and Europe are already too indebted to bail out their central banks. An insolvent government cannot bail out an insolvent central bank.