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The US government does not really borrow US dollars from US banks to pay for its expenses. The US congress passes laws that authorize Federal Reserve Board (via Chairman Ben Bernanke) to buy some paper and then print a bunch of new interest bearing paper currency instruments in varying amounts with the...
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[quote user="Libertarian_for_Life"] According to Ch. 12 in "Economics in One Lesson", in the scenario in the 2nd paragraph, the British importers pays in pounds, then through exchange or direct buyback, someone in America must buy something from Britian because he can't use the...