The facts are Billy T that the Federal Reserve can reduce the money supply by just reversing what it has been doing. Instead of buying debt, it can sell debt. And it can sell debt until the proverbial cows come home. Instead of lowering the discount rate, it can raise it. Instead of decreasing bank reserve requirements, it can increase them. All of those actions remove money from the money supply. The Fed doesn’t need to have a big bond fire and destroy dollars to reduce the money supply; nor does it need to confiscate dollars; it just needs to be able to remove those dollars from circulation when appropriate using the aforementioned market based tools. The true answer is the Fed doesn’t need to confiscate you dollar to reduce the money supply. It just needs to be able to reverse what it has done. And the Fed is certainly capable of doing that.