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Who Gets To Retain The Cash When A Business Loan Is Fully Repaid: The Bank, The Federal Reserve or the US Treasury?

This is a simple question.

Treasury Bonds are issued (sold), paper money is printed and loaned to member banks at prime to make money available for commercial loans.

Ok, I get that. But who owns the cash when the loan has been repaid? When the Federal Reserve is repaid at the prime rate do they destroy the money, do they refund it to the US Treasury or does it become the property of the PRIVATE central bank and / or doled out to their member banks?

Who gets to keep the money that was created out of thin air in order to facilitate commercial lending? Does anyone know?

Does the money eventually go to repay the holders of Treasury Bonds? Surely not.

And with that in mind, how is it that the Federal Reserve has become the largest purchaser of US Treasuries; effectively creating the largest ponzi scheme in the history of the entire world.


Please don't tell me what you think. Instead, tell me what you know and prove it with some actual links so we can help others at the Daily Paul understand how the system is supposed to work as opposed to how it actually works.


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The principle is destroyed.

The principle is destroyed. It was created from thin air, and into the thin air it returns. Poof!

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"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

is that also the case if...

the loan is defaulted on? In that case there would be massive deflation