From what I understand the Fed often uses the money it issues to buy assets thereby getting richer through the creation buying process according to basic logic Wrong Let s say that the Fed decides to buy government securities owned by Wells Fargo The people at Wells Fargo and the people at the Fed decide that the securities in question are worth 10 000 What happens is that Wells Fargo transfers 10 000 of securities to the Fed and the Fed transfers 10 000 of Federal Reserve notes to Wells Fargo actually more likely the Fed simply credits Wells Fargo s checking account at the Fed but we re illustrating a point here On the Fed s books the Fed debits an asset account called investment in government securities or whatever for 10 000 and credits a liability account called Federal Reserve notes outstanding or whatever for 10 000 You have a balance entry and there is no gain or loss on the transaction If the value of the securities later goes UP to 11 000 and the Fed sells them for that amount the Fed has a 1 000 gain but that s no different than if YOU had bought the securities for 10 000 and sold them for 11 000 Again a Federal Reserve note is generally never money when its held by the Federal Reserve System It s money for YOU when YOU hold the note But as soon as that note is returned to the Federal Reserve System its legal and economic substance is extinguished The Fed can not owe money to itself Similarly you can not owe money to yourself at least not in the sense that we re talking about