A foreign central bank borrows Federal Reserve Notes ("US Dollars") from the Federal Reserve.
The foreign central bank now has US dollars and the FR has an IOU from the foreign central bank. Years later, the foreign central bank is supposed to pay back the IOU (basically, a loan).
The foreign central bank then lends these US dollars to insider buddies who own banks in that country so they have US dollars (think of Venezuela, where the currency is not very tradable on the world markets).
These banks then lend money to local companies in US dollars rather than the local currency.
The story is that it helps foreign countries get US dollars into their economy when they have a currency that is weak due to stupidity by their government, destroying their economy and their currency.
In reality, the Federal Reserve has never been audited in any meaningful way, so we don't know what those agreements really do or who they are with.
It could be done with any foreign central bank, even countries with good currencies.
It could be a good way to gain leverage over other countries ("you owe us a gazillion dollars, but we will let some payments slide if you require everyone to get the experimental vaxx").
It could be a good way to inflate the US dollar even more by flooding the world with US dollars, causing hyperinflation, and leading to a "reset" with a one world government currency.
The Federal Reserve is a private business, and only the federal government has constitutional authority to coin money.
A foreign central bank borrows Federal Reserve Notes ("US Dollars") from the Federal Reserve.
The foreign central bank now has US dollars and the FR has an IOU from the foreign central bank. Years later, the foreign central bank is supposed to pay back the IOU (basically, a loan).
The foreign central bank then lends these US dollars to insider buddies who own banks in that country so they have US dollars (think of Venezuela, where the currency is not very tradable on the world markets).
These banks then lend money to local companies in US dollars rather than the local currency.
The story is that it helps foreign countries get US dollars into their economy when they have a currency that is weak due to stupidity by their government, destroying their economy and their currency.
In reality, the Federal Reserve has never been audited in any meaningful way, so we don't know what those agreements really do or who they are with.
It could be done with any foreign central bank, even countries with good currencies.
It could be a good way to gain leverage over other countries ("you owe us a gazillion dollars, but we will let some payments slide if you require everyone to get the experimental vaxx").
It could be a good way to inflate the US dollar even more by flooding the world with US dollars, causing hyperinflation, and leading to a "reset" with a one world government currency.
The Federal Reserve is a private business, and only the federal government has constitutional authority to coin money.
It is a scam.
Thank you MAG768720. Now Im getting the gist.
Great reply, much appreciated.
Very nice explanation. I might add that it’s a clever way to delay inflation domestically, as it takes time for the USD to make it back to US economy