Over the last 2 weeks we’ve seen how our current money and banking system fuels cycles of boom and bust, with banks making loans (creating…
Tag: banks
This week I wanted to show you visually some of the effects we’ve been talking about over the last few weeks. One of the points…
So why does all this matter? First of all, you need to think back to the conclusion drawn in this post: “Decisions about who to…
I’ve now, in three posts, given a basic (but reasonably complete) overview of how money creation actually happens in the real world. But what you’ve…
In the last couple of weeks we’ve seen that banks create money when they make loans, and that the only limitation on their ability to…
If banks create money simply by typing numbers into a computer, why can’t they create limitless money for themselves, and how can they go bust?…
To understand where money comes from, we first need to picture the banking system. All banks have an account with the Central Bank (for example…
It’s now been 16 weeks of posting every Friday, and I’ve reached the end of a series of posts setting out some fundamental concepts. I…
We’ve spent two weeks looking at fractional reserve banking, and I pointed out that although this is the model presented by textbooks, it bears very…
Last week we added Fractional Reserve Banking to our “engine”, where the bank acts as an intermediary between savers and borrowers, keeping a fraction of…