Can you explain how the Federal Reserve Creates Money Out of Thin Air & Why High Taxes are needed to Maintain the Illusion of Government Funding?

The Federal Reserve operates under a system called “fractional reserve banking,” which allows money to be created from nothing.

Step 1: The Federal Reserve “Buys” Treasury Bonds

When the U.S. government needs money, it issues Treasury Bonds— essentially IOUs that promise to pay interest in the future. The Federal Reserve “buys” these Treasury Bonds, but instead of using real money, it simply creates new dollars out of thin air by making a digital entry on a computer.

• The Fed doesn’t have a vault full of cash to hand over—it literally invents money on demand to purchase these bonds.

• The government now has these newly created dollars to spend, increasing the overall money supply

Step 2: The Illusion of “Government Funding” Through Taxes

Most people believe that their tax dollars fund the government—that the IRS collects money, and then Congress distributes it to pay for public services. This is false.

• In reality, the government already gets all the money it needs from the Federal Reserve creating new dollars whenever necessary.

• Taxes are not needed to fund spending—the U.S. government could operate without collecting a single dollar in taxes if it wanted to. So why are taxes still so high? Because high taxes serve a psychological and economic purpose:

Step 3:

High Taxes Maintain Confidence in the Dollar The entire global economy depends on people believing the U.S. dollar has value. The dollar is a fiat currency, meaning it has no intrinsic value—its worth is purely based on faith and confidence in the U.S. government.

• Taxes create the illusion of scarcity. When people believe that money is hard to come by because of taxes, they place higher value on the dollars they earn and spend.

• If people realized taxes weren’t necessary, they might question why they are paying them—which could erode confidence in the system.

• A tax-free economy would expose how money is created from nothing, leading to widespread distrust in the government and the financial system.

Step 4: Inflation and Debt

Every time the Federal Reserve creates new money, it dilutes the value of the existing money supply. This leads to inflation, which is essentially an invisible tax on every American. Instead of directly taking your money through taxes, the government erodes your purchasing power by printing more money.

• The national debt is never meant to be paid off—it keeps growing indefinitely because the system is designed for perpetual borrowing and spending.

• If Americans stopped paying taxes altogether, the government would still continue operating exactly the same way—by printing more money. The Truth About Taxes

• Taxes are a form of economic control, not a necessity for government funding.

• The real purpose of taxation is to keep the public in check, create artificial scarcity, and prevent people from realizing the truth about how money is created.

• Those who understand this system—the ultra-wealthy and corporations— use 12 USC 411 to opt out of income taxes completely while everyday Americans continue to foot the bill.

How to Opt Out of the US Income Tax Legally – Use Wealth Guaranteed’s 12-411 Process.

Our 12-411 process allows Americans to legally opt out of paying income taxes by using a little-known federal law that lets you redeem Federal Reserve Notes for lawful money—making your income non-taxable. By understanding how money is really created and how the tax system truly works, you can legally remove yourself from the tax trap and take control of your financial future. Join our live Infosession this Thursday to learn how to eliminate your tax liability and get a 100% tax refund every year!