It may take an economics expert to fully understand what Ron Paul is suggesting, but it sounds as if it might work. He wants the Feds to destroy the $1.6 trillion in government bonds.
Its assets are in fact assets of the government. Each year, the Fed refunds the interest earned on its assets in excess of the money needed to cover its operating expenses. Last year the Fed refunded almost $80 billion to the Treasury. In this sense, the bonds held by the Fed are literally money that the government owes to itself.
Follow the link to read more about this idea.
Will it work? I am not sure, but it sounds possible. The problem I have with it is that it doesn’t sound as if should be legal? But what do I know? The comments on the site are interesting.