Page 32 - Planet Rothschild. Volume 1 : the forbidden history of the new world order, 1763-1939

CENTRAL BANKING AND GOVERNMENT DEBT

When government uses up the money it collects in taxes, it resorts to borrowing.
It can borrow by selling bonds to investors, or to foreign governments. But
when governments borrow from a privately owned Central Bank, the Bank

is actually creating new money "out of thin air" and then lending it to the
government at interest. The injection of new money into the economy has the
effect of reducing the value of existing money (inflation). The government must
then tax its citizens to repay the loans (Bonds) to the Central Bank, plus interest.

If the government were to simply create its own debt-free currency to cover its
bills, there might still be an inflationary effect, but the government would not

carry debt, and therefore not need to tax its people to pay principal and interest
to the Central Bank.

It makes no sense for a government to pay interest to a Central Bank on
new currency when it can simply create the currency itself, interest free!

CENTRAL BANKING AND LOCAL BANK / CONSUMER DEBT