When a central bank prints money to buy the bonds of its own government, a loop gets created whereby the Treasury issues paper, the central bank buys it, the Treasury pays interest to the central bank and the central bank makes a periodic payment back to the Treasury. There are plenty of examples of this activity around the world. While there is no disappearing the debt on the books of governments in the current model, we think that an age of new thinking about money means that central banks could wind up clearing up the value of their debt holdings in a stellar write down.
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