Wednesday, November 3, 2010
I have a question.
This isn't it: The U.S. Dollar is backed by federal debt.
When you walk around that fact, inspect it, kick the tires and such, you get to the far side of it, where you can see what it means that the dollar is backed by debt. What it means is, for every dollar of money -- every dollar of base money, I think -- there must be a dollar of federal debt to back it up. There has to be that debt.
So now, the question: Does there also have to be a dollar of money, for every dollar of federal debt? No... But I'm thinkin there has to be a dollar of money for every dollar of federal debt held by the Federal Reserve. Is that right?
Any thoughts? The fate of an upcoming post depends on your answer.
Posted by The Arthurian at 7:07 PM