The u. s. constitution gave congress the exclusive power to create but the coterie of private bankers who compose the fed now exercise this sovereign power. check the money in your wallet; every bill of whatever denomination is labeled "federal reserve note." when the treasury needs money, it must turn to this private banking institution, the federal reserve. the treasury prints interest-bearing u. s. government securities, an issue of, say, value. these securities are ious that are given to the fed. the fed then enters as a debit, which is given to the treasury. if treasury wants it in cash, the fed has the cash printed at the bureau of engraving and printing, the same place government securities are printed. the fed then enters on its books as a credit owed to it by the treasury, and now collects interest on the asset. when the reserve ratio is eight to one, the fed can lend every dollar it has on reserve. in effect, much of the money it lends is created out of thin air! instead of issuing interest-free money of its own, the u. s. treasury is borrowing from a private banking source, the fed, incurring an enormous debt. thus the major banks are allowed to create fiat money and collect interest on that money from the government and the taxpayers. the federal reserve is a money-making machine, returning a year in profits, a grand source of income that goes directly into the bulging coffers of a tiny financial class.