Lee Lofaso - Wayne Harris  writes:

[...]

>  WH> On page 192 of the 5th edition, George Edward Griffin begins to describe
>  WH> the ``Mandrake Mechanism''.  I was warned that the process might not
>  WH> make much sense, but I'm not trying to find any sense in this.  My
>  WH> interest in only in clarity.
>
>  WH>    ``First, the Fed takes all the government bonds which the public does
>  WH>    not buy and writes a check to Congress in exchange for them. (It
>  WH>    acquires other debt obligations as well, but government bonds
comprise
>  WH>    most of its inventory.)''
>
>  WH> Let me take each step carefully.  The government issues bonds.  Some
>  WH> people buy it.  Some bonds are not bought.  How does Congress get
>  WH> involved in this?  Is it the case that Congress buys all those people
>  WH> did not buy?  With what money does Congress buy?  Is Griffin saying that
>  WH> the Fed itself ``writes a check to Congress'' so that Congress can
>  WH> afford it?
>
>  WH> Let me begin with these questions only.  Thank you.
>
> The Congress does not spend money. It merely appropreates funds.
> That is what most folks fail to realize, or simply do not understand.
> Bankers understand the process, and how to make money work for them.
> You see, money is nothing more than a medium of exchange. And as you
> know, no real money ever passes hands in Congress.

I think you answer the questions above, but not in an explicit way as I
need to.  I'm slow.  I need more explicit help.  You might be saying the
Fed provides Congress with the money for buying out the bonds the people
did not buy, but it's not clear.  If you're saying that, I'd need you to
say it explicitly and hopefully with a pointer of the accounting events
that would show it.

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