[GodGunsGuts]

That's why I put asterisks around assets. In other words, it's circular. Both are only worth as much as the faith people have in them. In other words, there is no intrinsic value in FR notes. And that's the whole point of the article. That's why he calls fiat money "irredeemable currency." So you were saying???

[Toddsterpatriot]

Both are only worth as much as the faith people have in them. In other words, there is no intrinsic value in FR notes.

So, when he said, "Thus, then, there is an official check-kiting between the US Treasury and the Federal Reserve. The former issues bonds with which FR notes are backed; the latter issues notes used to pay off the bonds at maturity".

He didn't mean "bonds with which FR notes are backed" he really meant the notes aren't backed at all. So you were saying???

Are you going to use some of your derivative knowledge to explain "How you can write contracts to buy bonds, five times greater in amount than all the bonds in existence?" Or maybe you'll explain cash settlement? LOL!