When the us gov. says its a trillion dollars in dept how come the department of treasury along with the..... ?

Question

federal reserve bank just dont print up the money to cover the dept .

Answer 1

that's basically what they do -

since the govt stopped backing the value of the $ with gold/silver

the govt prints money when it needs it - thereby creating the debt

Answer 2

To have value, money has to be backed by something.  That's what all those shiny bars of gold are doing at Ft. Knox.  There has to be enough gold there to support printing more money.  Otherwise it's just paper.  This is the tip of that iceberg.

Economics relies on the principles of supply and demand.  These principles dictate how increases or decreases in either supply or demand affect the other property.  You've probably noticed that when a lot of people want something, the price tends to increase, and that is particularly so if the supply of the thing is actually or by manipulation short.  That explains in part the price of things like gas, diamonds, etc.  Following these same principles, if there were to suddenly be trillions of extra dollars in circulation, it would have the effect of weakening the dollar, in this case, dollars that had little value in the first place because they were printed without the requisite collateral behind them to make them valuable.  It is for this reason that counterfeiting is illegal.  It gives sellers useless pieces of paper in exchange for goods or services thereby constituting theft and has the potential to destroy our economy.

Answer 3

That's how the government gets in dept in the first place.  Before the federal reserve system the US Treasury was responsible for printing money and they did so "debt free", only incurring the cost of rapid inflation.  Now with the federal reserve a group of privately owned banks print up federal reserve notes at the cost of the paper and loans them to the government at interest.  Now not only does the government incur inflation by "borrowing" the dollars but now it has to pay interest on the money.  If this system sounds crazy to you then you are not alone...

What right do private banks have to create money from nothing and charge interest on it?  It's just nuts.