Money creation: who creates money?

debtcutter

http://www.youtube.com/watch?v=mIIAvdJvCes

A very simple explanation as to how money is created and the multiplier effect.

So many people believe that banks lend customer deposits to other customers, earning the interest.

One of the biggest misconceptions of all time.

Worth 8mins of anyone's time.

purch

So many people believe that banks lend customer deposits to other customers, earning the interest.

Please do not insult the members of this forum.

The biggest misconception is that people do not already fully understand this concept.

debtcutter

Two things:

1) I really wasn't trying to insult anyone, apologies if my post came across patronising in any way (although I'm pretty sure it didn't).

2) Do you genuinely believe that more people understand what fractional reserve banking is, than don't? If so, ask the next 10 people you meet to explain it.

Really interested to hear what you think about the concept of money creation and the multiplier effect.

I was merely trying to start a conversation about a subject I'm interested in..... cripes.

FTBFun

I was taught about fractional reserve banking in A-level economics nearly 15 years ago.

I would actually think most people couldn't care less how the banks actually work as long as they do.

Anyway - what is your opinion on silver?

debtcutter

OK, maybe I should have searched "fractional reserve" before posting a whole new thread.

Just found a whole heap of discussion already on here (sorry n00b)

I do find it quite amusing that in current times you say "people couldn't care less how the banks actually work as long as they do."

How many Northern Rock customers would agree that banks "are working" as they should.

Not sure what you want to discuss re: silver. Could you be more specific?

Again, sorry if I've started a thread that's not welcome round here, especially now I've seen others in existence.

purch

debtcutter wrote: »

Do you genuinely believe that more people understand what fractional reserve banking is, than don't? If so, ask the next 10 people you meet to explain it.

One thing.

This is a closed forum.

We are not talking about the next 10 people I meet.

The members of this forum understand now this works.

purch

debtcutter wrote: »

Really interested to hear what you think about the concept of money creation and the multiplier effect.

What I think about the concept :eek:

It's not a concept.

It's a fact.

You'll be asking what I think about the concept of Oxygen next !!!!

debtcutter

P.s - if you're trying to bait me into talking silver price conspiracies theories, I'll start with:

The price of silver is currently strangely high, very strangely.

Do I think it will stay that high? Probably not.

What's your view?

purch

debtcutter wrote: »

Just found a whole heap of discussion already on here (sorry n00b)

And please don't insult the intelligence of forum members by trying to pretend that you are new to this forum.

As previously noted this is a closed forum, so unless you already knew of it's existence you wouldn't have been able to join.

debtcutter

purch wrote: »

What I think about the concept :eek:

It's not a concept.

It's a fact.

You'll be asking what I think about the concept of Oxygen next !!!!

Concept - as in: A plan or intention.

Fair point though, it's not correct to label it a plan, or intention. It was once though.

Fair enough if everyone on here understands, but after some of the posts I've read, since joining, I find that hard to believe.

Again, not meaning to upset anyone, do you always get so upset if people bring this subject up on here, or is it just the way I presented the link?

Like I say, still new, so your feedback may help me not offend other posters.

debtcutter

purch wrote: »

And please don't insult the intelligence of forum members by trying to pretend that you are new to this forum.

As previously noted this is a closed forum, so unless you already knew of it's existence you wouldn't have been able to join.

Sorry, but I literally signed up less than 2 weeks ago

What do you mean by "closed forum".

I've only just signed up, so they must be letting people register now

Can you explain what you mean by "unless u knew of its existence", I'm not saying id never heard of martin lewis or money saving expert. I'm pretty sure 95% of the country have