Arjay,
When the US Government wants money, it issues Bonds to the Fed which uses these to request money to be printed by the treasury.

It's not backed up or guaranteed by anything or anyone. It's only significance is that it is illegal to refuse currency in exchange for goods or services.

Look at a US banknote. It's labelled a "Federal Reserve Note".
http://konqueror.files.wordpress.com/2008/04/800px-one_us_dollar_note_0127_22.jpg

Only about 5% of money exists as cash. Most money created by the Fed is "virtual money".

Taxes collected are paid directly into the Fed and refunds are issued from the Fed.

Every financial transaction the US government makes -in or out - goes via the Fed.

If your last statement is true Wobbles,then the Fed Res is truely an abomination.They have gotten away with this for almost 100yrs.
It was Woodrow Wilson back in 1913 on the 22nd Dec that signed away the right of Congress to own the US currency.It was done on almost the eve of Christmas when few were there to witness it.Wilson was later to lament that he'd sold out his country.He had no idea of what he was signing.

Obama is just the olive branch to the US public.He has no knowledge of finance or economics.It is the Fed Res who have the real power and it is they who select maluable presidents.

JF Kennedy tried to break the power of the Fed Res and he was assassinated.The US only has the facade of democracy.It is actually run by a facist dictatorship called the Fed Res.

The lack of reponse to this discussion just demonstrates how ignorant the masses in our society are in the real world of their survival and quality of life.

Many topics in Gen Discussion are conecerned with a microcosm of some personal affliction or injustice,not the big picture which ultimately determines these personal afflictions in the first place.

I don't think that most people have clue,as to the economic steam train that will soon engulf us.Pray that there is a compassionate god,since many amongst our humanity will destroy all in their path for the sake of security and power.