Money creation: who creates money?

jamesmorgan

antrobus wrote: »

Of course, if the someone concerned decides not to deposit £100 with the bank, but rather goes onto Zopa, they can lend that £100 without any fractional reserve whatsover. And when that same £100 ends up in the hands of someone else, they can do the same thing.

Yes, but the big difference is that if lend £100 via Zopa I no longer have that money. It gets transfered from one of my accounts to one of their accounts. There is no net creation of money in that case.

jfh7gwa

Graham_Devon wrote: »

The whole silver thing, as I stated on another thread is getting tiresome. Every single new poster is getting labelled by two or three, no matter what.

We want new posters on this board, so it would be a shame to keep sending them away after insulting them, just for posting something you may disagree with.

I've been reading the MSE forums for several years, and I still hesitate to post in this specific section of it, there are so many cliques and in-jokes/in-fighting/baiting/acronyms that never get explained - it's really quite off-putting to newbies and quite at odds with the very friendly atmosphere of the other board sections which I have in my bookmarks. (I count myself as a newbie in that I perhaps don't have much in the way of contributions, but am certainly in the long-time reader category.)

I'll go back to reading this board from afar now (mostly).

debtcutter

It does seem like this sub-forum is held a little too close to some hearts.

It's great though, had a look at some threads in here, some are really interesting, but I'm kind of scared to reply to most. The last thing I want is silvergate 2. This one was bad enough.

Thanks again to everyone that explained the situation rather than throwing around thinly vailed accusations. Appreciated.

If people have an issue in future, PM me. I won't mind explaining myself if you ask me a question.

I can even give you some advice on investing in minerals, if you like

(joke, mineral advice will not be provided)

geoffky

How does it work?

debtcutter

geoffky wrote: »

How does it work?

As you have a quote from Nathaniel Rothschild in your sig, I don't think you need it explained.

lostinrates

purch wrote: »

Paranoid :eek:

I just asked you not to insult the members of this forum by assuming that they had no idea of how money is created.

Feel free to insult me.


I have forgotten the little bit of this i was beginning to understand. I have no doubt at all that i am not the only person who uses this board who understands less of it than they would like to and possibly less of it than they think they do.

purch

Time to up the dosage on my Amlodipine I think :eek:

Masomnia

IronWolf wrote: »

Yes that's how I understand it works, but that's not what I interpretted the video as saying.

Did anyone else interpret it as I did?

I interpreted it the same as you, so I think it is misleading.

I reckon the confusion arises where people use 'deposits' and 'reserves' interchangeably.

debtcutter

Why?

Has this thread genuinely stressed you out?

DannyRadclif

Its not the banks who create the currency out of thin air its the person.

Every time someone buys something with a credit card, or borrows any currency at all (mortgage) the currency springs into existence the moment you swipe your card. That currency did not come from anywhere, it was just created by the person who swiped their card and the bank gets to charge you interest on the currency you just created and added to the supply.

The thing is with outstanding revolving credit, when the person receiving the currency just created on the credit card puts into into their bank account, this new bank can not tell the difference between base money and the outstanding revolving credit supply.

Please tell me if this is wrong and which bit and I will be happy to admit it if it is wrong, it does take a bit to get your head round where each unit of currency around the world comes from.