Here's how it works; The FED is banking the Treasury. Does the Treasury need a bank? Hell No, Thomas Jefferson tried to get that cleared up from the beginning, but it was a battle the US was destined to lose. So how does that work? Same as any other bank loan. The money (capital) is created on account. If you stopped to think about it; the bond is drawn up out of thin air, it is created from nothing; and it is every bit a part of the currency as the bank currency on the other side of the accounting equation. So on one side is the bond that is drawn up out of thin air and on the other side is the checking account for the Treasury where the credit is created out of thin air to match the bond. We call that checking account, the general fund, that's what our Treasury checks are written from. Now, the Treasury doesn't need any of this, the Treasury can and has created one party paper; it's own. The Treasury doesn't need a bank to create money. But the banks need the Treasury to create their paper; without those bonds they have no one to loan money except the commerce on main street; a bank creates all it's capital from thin air; all bank money is created out of thin air, regardless of who they loan it to. That includes the Treasury. And yes, they do create as much of it ... as possible. They do that by loaning it out. Loans create the currency. A bond is just another type of loan. When banks create their paper (bank money) they supposedly loan out their asset/reserve, but in reality, they don't touch the asset/reserve, they create all the money for the loan out of thin air. Initially this began as coupons printed up that were redeemable for gold on account. Today, the notes are no longer redeemable for anything, and the banks all print up the national currency instead of their own, but the process is the same; they create the currency when they make a loan. Put another way; loans create the currency. Capital is created this way. But the money is synthetic, the money is an accounting for goods and services; so making more of it, doesn't create more wealth, it just dilutes the value of the money; IOW you are still accounting for the same goods and services, you just have more money on hand to value it with, so the money devalues, not the goods and services. When you get into value, you have to understand how markets are centralized or localized, so it is a little tricky, but the idea here is to understand that money merely values wealth for the purpose of trading it; hence, money facilitates the distribution of wealth (and redistribution also) money does not create wealth. The Treasury really can create all the money they want to create, there is no limit. The banks need to make loans, but the Treasury can print money (capital) out of thin air, as much as they want to. Why bother? It just revalues the money, it doesn't create wealth. You have seen me recommend tweaking the creation of money/retirement of the debt, for the purpose of redistribution/taxation; that's what synthetic money is good for... distribution. Capital investment is merely a redistribution of the currency; one that is created through cutting taxes on the global corporations. I didn't make any of that up. That's the system, it functions to distribute the wealth. When you cut taxes on the middle class, they spend it, it goes right into the economy. But when you cut taxes on global corporations, they invest it; hence; capital investment. Depending on what investment they choose - that's the bitch - that capital could flow into the stock market, the bond market, new enterprise at home, new enterprise abroad... it isn't so easy to get them to do what the government wants them to do with the money. But it isn't a myth that tax cuts create capital investment; that's more like a principle; tax cuts to the globalists are going to create capital investment; the question becomes... capital investment into what? For 25 years the answer was infrastructure in the western Pacific rim, including the largest shipping lanes ever created on earth to move all the product. So now you get the point behind "America First". Trump is trying to coerce the globalists into investing their capital into American industry. I think his timing is good, but the question still remains; will automation continue to negate the creation of new jobs? The GDP will respond to capital investment, but will we get jobs for the lower middle class? I kind of doubt it; the rich will get richer, the government will increase it's tax base, but the jobs will go to engineers, especially robotics. Those people are already employed to the hilt. I argued this ten years ago; how are you going to get a global corp to build a new factory in America to compete with the one they just built in China or Vietnam? That's why it is hard to get those lower middle class jobs back. Rather than fight with illegal immigrants for them, we need more of them. the tax cuts will create some... but not the volume we need, unless Trump really has enough rich friends willing to invest in america's lower middle class and phase out some of their western Pacific Rim operations?