How does NESARA immediately cancel approximately $1 trillion of the public debt?

Once NESARA becomes law, several changes take place. One change is that commercial banks no longer can hold as reserves any income producing U.S. debt obligations. Therefore, to maintain reserves all banks must trade these obligations for the newly created Treasury Reserve credit-notes.

(Banks can keep the obligations as assets, but will be unable to count the obligations as reserves.) Before converting the Federal Reserve System to the New Treasury Reserve System, all obligations held by the Federal Reserve System are traded for credit-notes. Because those newly received credit-notes are to be used as reserves, they do not enter into circulation and are therefore not inflationary. Once the Secretary of Treasury receives all of these debt obligations, the Secretary merely cancels them out of existence, thereby significantly reducing the public debt.

The actual amount eliminated is unknown, but $1 trillion is a reasonable figure. Realize, of course, that the debt held by the Fed is ... more.

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