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So why does it say in big letters, FEDERAL RESERVE NOTE?
Power of the US Economy == "Full faith and credit" no collaterol
Because it is backed by the assets held with the federal reserve.
the federal reserve itself cannot print money. that is only allowed by the US treasury department.
So when more money is needed then the Federal reserve makes a request to the treasury to print more bills.
The treasury handles the printing of money and the payment of US debts etc ...
the federal reserve overseas the money supply and creates the money policy.
they are totally separate functions of government.