You have to understand US debt before you can understand any of this. --- After a borrower signs the promissory note on the loan he gets, and trades it to the bank for the loan money, the bank monetizes the promissory note. It sells the note usually for a discounted rate. Besides this, the borrower usually repays the loan, as well, over the years. So, what does the bank do with the money that it gets from monetizing the promissory note? With all this money, there should be no bank failures at all! Or does the bank pass this money on to the Federal Reserve Bank, who passes it on to its owners? Now we are beginning to see why the owners of the FED can't help but get richer and richer... and why we have such a high rate of inflation when they spend the money around the world.