Money Creation

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rajiv's picture
Status: Member (Offline)
Joined: Aug 7 2008
Posts: 3
Money Creation

On Itulip, one of the "Freds" (admins) put the following comment

It's good except that he makes a number of classic errors. For example, in "Section 7: Money Creation" he explains how money is loaned into being by banks. He's confusing the money multiplier effect with the process of money creation.

All money is borrowed into existence. It may be loaned by a bank when you take out a mortgage, a credit card company when you buy dinner, a car company when you finance through them, Dell when you buy a latptop on lay-away, and so on. Once created, the money then flows throughout the economy: Dell pays its suppliers, who in tern spend the money, the resaurant pays the wait staff and taxes to government and so on who all go spend the money, and so on. That is the important thing to understand about the modern money system, that is has far less to do with banks but credit issued by tens of thousands of organizations, the interest rates set by the credit markets, which is why the Fed is so much less relevant today.



Any comments/responses to this?

CuZn30's picture
Status: Member (Offline)
Joined: Aug 24 2008
Posts: 1
Are we talking about the same Alex Jones that has teamed up with Corsi to write Obama Nation? The last big hit for Jerome Corsi was the swift boating of John Kerry.
greypilgrim's picture
Status: Martenson Brigade Member (Offline)
Joined: Jun 30 2008
Posts: 7
VIDEO US Headed Toward Bankruptcy, Says Top Budget Committee Rep
This video just underscores what Chris is talking about. Looks like we have about 10 years until things get really bad... Alex Jones at has lots of other great info.

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