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Originally Posted by Shoonra
I would assume that the term "lawful money" was applied to paper United States Notes to indicate that they were legal tender -- that is, money created by law rather than by market forces (like precious metal) , effectively fiat money since United States Notes were not guaranteed convertible to gold or silver.
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So if the Federal Reserve is a private central bank, do you think its notes and credit come into circulation by "law" or rather by market forces?
It is debt, both public and private, that puts those Fed notes into circulation.
Levels of outstanding debt in an economy are generally controlled and defined by prevailing market and economic forces, moreso than government decree.