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all 63 comments

[–]Sjssjsjsjsjsjsjjsjsj 23 points24 points  (1 child)

Be careful to separate money and wealth. Rich can refer to both concepts.

It’s easy to make more money. You can literally print more of it. But I assume the question you are asking is how does wealth increase per capita over time? (Or maybe not? If you want to know how money can increase or decrease we can talk about that too)

The concept of wealth is a little tricky because we most commonly measure it in terms of money. One classic illustrative example is if two men are on an island and one is really good at finding coconuts and one is really good at finding water, they both benefit when they exchange coconuts for water (trade). Also if one guy develops a coconut harvesting device now he becomes considerably wealthier as he can get more coconuts per day (technological advancement).

Note that population growth doesn’t directly improve per capita wealth. That said perhaps you need at least 10 people working on food and shelter before you can have someone focus on making art. And the larger your population the more exceptions individuals you have who might benefit your entire society.

There’s an analogy to be made here about demand, capital, technology, and economic growth that’s sort of fun. But hopefully This makes some sense. If you are really interested take Econ 101. Badecomics subreddit is also a fun place to read what actual economists think about various economic topics. Igm forums are a fun and super accessible place to see what actual economists think of various topics. Then if you want to repeatedly smash your forehead into your desk read your average reddit thread on anything economics related.

[–]PrisonIsLeftWgUtopia 13 points14 points  (0 children)

Economics really should be taught in middle and high school. And not just junior or senior year of high school either

[–]zc_eric 19 points20 points  (1 child)

Let's ignore money for the time being and look at creating value:

If I plant a tree, let it grow, chop it down and make some furniture out of the wood, I have created something of value which didn't exist before. I have thus got a little bit richer. I could have used other examples eg taking clay from my garden and making a pot.

It gets even better if two people create value as they can trade with each other. Maybe my tree furnishes enough wood to make ten chairs, but I only need 2. I can swap those 8 chairs with other people who also have an excess of whatever goods they manufacture. Each swap makes both participants richer. I would rather have the other goods than the chairs; they would rather have the chairs than the goods they swapped.

Now money, is really just a way of facilitating the swaps. I might have a chair I want to swap, but nobody who wants a chair has anything I want. But if I can swap the chair with person A for some money, and then I can swap that money with person B, for whatever it is I want, I am happy - and so are A, who by giving me some money has completed his swap, and B, who is now able to swap the money with person C for whatever he wants).

So the value does not lie in the money itself; the money just represents the value that has already been created. The money each individual possesses at any moment represents the value they have created for other people minus the value others have so far created for them (for which the individual has paid money).

As such, you don't need extra money to represent the extra value. The extra value lies in the objects and structures we have created.

[–]plugubius 7 points8 points  (0 children)

This is the first answer here that recognizes money as a medium of exhange rather than a measure of something else.

[–]coachm4n 22 points23 points  (28 children)

Money is just a representation of value creation and value is constantly created. For example someone could buy a $2 notebook and $1 pen and create a $1.000.000 screenplay.

[–]beer_demon 15 points16 points  (27 children)

Yes but that 1.000.000 comes from the pockets of other people. You created individual value there but you haven't shown how global value is created.

[–]EnaiSiaion 5 points6 points  (3 children)

People are willing to spend $1M on your screenplay because it's worth more than that to them. So they gain value.

You also gain value because $1M is worth more to you than the screenplay.

In the end, both sides win.

[–]beer_demon 0 points1 point  (2 children)

Not denying that. But at equal amount of resources, the perception of value seems imaginary. If suddenly I value something costing $10 at $374738288229 there is no inherent value increase, just an illusion of value. How is that sustainable?

[–]EnaiSiaion 2 points3 points  (1 child)

Uh, the assumption is that you're not lying to yourself. :P

[–]beer_demon 0 points1 point  (0 children)

And we know what happens when it goes wrong.

[–]smugbug23 4 points5 points  (2 children)

Yes but that 1.000.000 comes from the pockets of other people.

...and went into the pockets of other people. The money did not disappear into nowhere. But the enjoyment of watching the show did appear out of nowhere.

[–]beer_demon 1 point2 points  (1 child)

But once it is watched it turns into...air?

[–]smugbug23 -1 points0 points  (0 children)

Fond memories

[–]Yancy_Farnesworth 2 points3 points  (3 children)

You have a stick and a sharp piece of rock. Individually they have limited value. Put together as an axe and you now have tool you can use to cut down trees for fuel to cook or to make more axes.

Even in the above example, the money was given in exchange for some sort of value to the customer. Like maybe the screenplay lets them continue to struggle through the horrors of life. The new value comes in the form of something that isn't directly monetary.

[–]beer_demon 0 points1 point  (2 children)

Let's say your reply was worth a million dollars to me.
You would think value was created, right?
But if in retrospect a day later I felt your post cost me $10 to read you have a huge loss of value ($1,000,050 loss to be accurate).

It seems that believers in a debt market focus only on the gains due to confirmation bias but forget the risks and losses, so you get bubbles.

Do you have an estimation of where the limit lies compared to natural resource extraction?

[–]Yancy_Farnesworth 0 points1 point  (1 child)

I'm not talking about speculation. Speculation just moves value around, it doesn't create nor destroy value. Bubbles don't destroy value. All they do is move the money to someone else.

[–]beer_demon 0 points1 point  (0 children)

My point exactly.

[–]Skyfahl 1 point2 points  (14 children)

Global value = sum total of individual value?

[–]bobdanderson 2 points3 points  (12 children)

And again, there’s no increase if total value. Some people give their money to somebody else. It’s only redistributed here.

[–]SkeweredFromEarToEye 4 points5 points  (0 children)

Not quite. Most money comes from various loans, which then are put into the economy when they are formed. Things can looked effectively weird if it's all one bank. Someone gets a loan. The bank creates the money (using the collective assets from all accounts to back it up). Said person gives it to you to buy what you're selling. You then give money back to that same bank. Now what's in the bank account records is a true asset for even more loans. Repeat process.

[–]Skyfahl -2 points-1 points  (10 children)

100 people have equal shares in some stock, valued at $100.

1 shareholder sells a share for $110.

100 people now have shares valued at $110. From where did the $1000 dollars originate?

Welcome to /r/latestagecapitalism

[–]dakru 7 points8 points  (2 children)

100 people have equal shares in some stock, valued at $100. [...] 100 people now have shares valued at $110. From where did the $1000 dollars originate?

I think this sounds a lot more profound than it actually is. All you're describing is that people can change what they're willing to pay for an asset. I don't think that's a particularly hard-hitting critique of capitalism.

If I have a stock that was worth $100 last week and now it's worth $110 this week, and you ask where that extra $10 came from, it sounds like you think that I actually received an extra $10. I didn't. I own the exact same money and assets that I owned last week. What's different is that the hypothetical price that people would be willing to pay, if I wanted to sell that asset, is higher now than before.

[–]Skyfahl 1 point2 points  (1 child)

...Which then becomes increased net worth. If you disagree that this development has made you "richer" (returning to OP's question) then I think you are in a semantic minority.

[–]dakru 5 points6 points  (0 children)

It's an unrealized gain. If someone wants to treat it as functionally equivalent to having more money then that could be fine (depending on the asset; this makes less sense for volatile assets), but it's not literally equivalent to having more money. This is important if we're asking where that extra money came from; the extra money didn't come from anywhere, because you don't have extra money. The money is still in the other person's bank account. What's changed is that they're willing to pay more of the money in their bank account, should you decide to sell.

[–]ado010 12 points13 points  (2 children)

From the value created by the company whose stocks are being sold.

[–]Skyfahl 0 points1 point  (1 child)

Cute.

[–]ado010 4 points5 points  (0 children)

Sure, but not as cute as you pretending these companies don't create value.

[–]PrisonIsLeftWgUtopia 1 point2 points  (0 children)

Value is not money. If you have a share that has x value, that is not money. You either get that value by selling the stock, or you get money if the stock pays dividends.

[–]oddpolonium 0 points1 point  (1 child)

From the fact that people value that company more - which is the same way all value gets created.

If I bought paint and a canvas for $10 and made a painting worth $100, where did the extra $90 come from?

Are you trying to say that a company like Apple has no more value than my local pennystock?

[–]PlutiPlus 0 points1 point  (0 children)

The extra $90 was not created by you or the person trading it to you. This transaction only involved pre-existing money. Anything else would be inflation or forgery.

One dollar's worth of penny stock is worth exactly the same as one dollar's worth of Apple stock. The value of Apple as a company would still be the same if they ran a split to the point where one stock was worth one penny. They'd just have a LOT more stocks. (Disregarding the effects such a maneuver would have on the market.)

[–]bobdanderson 0 points1 point  (0 children)

I wasn’t saying value can’t be created, just not in the way the example framed it.

[–]beer_demon 0 points1 point  (0 children)

Now you are onto something. What happens to all the negative values individuals keep getting?

[–]oddpolonium 0 points1 point  (0 children)

The $1M got printed by the government and released into the economy through public sector expenses, loans and maybe other ways.

[–]kouhoutek 2 points3 points  (0 children)

We make it, most everyone one of us. We take raw resources, add effort, and out comes wealth. Note that money and wealth are not the same things. Wealth is anything of value, money is a tool we use to assign value to and exchange wealth.

If I make a tomato plant grow where it wouldn't have otherwise, I get tomatoes I can eat. That is a thing of value that didn't exist before, and the world is slightly richer now. If I grow a lot of them, I can trade them for the coal you dug from your field or the fish you caught from the river. You didn't make either one, but you changed them from an unusable to a usable form, increasing their value.

You might take my tomatoes and can them, adding even more value to them. I might take your coal and use it to turn rocks into metal. The coal is lost but replaced by something of greater value. In all these cases, something exists that didn't exist before, or exists in a form that makes it more valuable.

The same is true for services. If I clean your house for you, that gives you more time to dig coal and catch fish, indirectly creating more value. If you teach me how to make fertilizer out of your fish, I can grow more tomatoes, also creating more value. Any time you pay someone to do something for you, it saves your time, money, or both, which you can use to creates something else of value.

[–]dougms 5 points6 points  (0 children)

Money is representative of work done. It’s traded for goods and services. Everything can be broken down into individual parts. A 20,000 dollar car is representative of individual nuts bolts, glass and plastic. When you spend money on it you pay for those individual pieces, every technician who put to together and built it, every person who worked on it. Some of those resources are recycled, but most are pulled out of the ground. The iron and aluminum from mines, silicone dioxide for the glass from beaches.

The car you bought sticks around for a few years. Once it’s built and paid for you can devote your time and effort buying other things. As long as it lasts longer than it takes to pull a new one out of the ground that wealth continues to build up. You can pay for another and it’s pulled out of the ground, assembled and built and delivered to your door.

Some of it is simplified with robotics and automation, which was itself pulled from the ground.

The same idea can be simplified. If you have nothing, and you go into the Woods Minecraft style and build a stone axe and use it to build a wood hut, the wealth is coming from the resources around you.

Most of them are renewable (wood) because of the sun, some have nearly limitless supply, (iron) because of the size of the planet. Some are more limited, like oil (how limited is another discussion).

So when you ask a 5 year old where he got his diamond pick axe, he made it himself.

TLDR the wealth is pulled out of the ground, forged into useful items, by us.

[–]UncleDan2017 4 points5 points  (0 children)

productivity gains. It used to take thousands of people to farm the same amount of wheat that a handful can do today, for example. Every day someone somewhere is figuring out how to produce more with less manpower and materials.

[–]I_am_Carvallo 1 point2 points  (0 children)

In a perfect world, this is possible if everyone does more work. In this fair world, money is a representation of someone's labor. The foods we eat, things we buy, and services we receive are available because someone worked to create it. So let's suppose everyone worked more, then there would be more goods and services to go around and everyone would have more money to buy these things. Of course, there are only so many hours in a day to work so that puts a limit on how much wealthier this makes us.

Another way to make everyone wealthier is by making everyone's work more efficient. This is possible with advances in technology. If you think about all the food, products, and services available to an average American in 2018 and compare that to one in 1818, then it is fair to say people today own more wealth because there are machines to make our jobs more productive. People used to work longer hours to create fewer goods. But even today people in some parts of the world don't have access to technology and its benefits.

In the real world, not everyone gets richer. It's hard to tell how much work of one type is equivalent to another type, so it's up to people's idea of its worth to give money its value. Often what happens is a small group of people gets richer by having ways to imbalance the exchange of money in their favor. That is, by force or by persuasion they make a large group of people do lots of work for less in return. A person in this small group could see everyone in this circle getting richer, without realizing there are those on the outside creating that extra wealth without being fairly paid.

Also, money itself has no value. Hyper-inflation in countries where the government is collapsing can make everyone have lots of money, but the money can't buy much at all, so rather than getting richer, these people are getting poorer.

[–]Garaleth 1 point2 points  (0 children)

Wealth is merely what we produce, with robots and more education we are becoming more productive and thus produce more per capita and thus wealth is created.

[–]deskcharger 1 point2 points  (0 children)

The money is a measurement of the wealth that has grown. The growth in wealth results from increases in human productivity (creating more with less effort), due to advances in technology, increasing human knowledge, more physical objects to assist us.

[–]Tragedyofphilosophy 1 point2 points  (0 children)

More overall money is just a representation of specialization and better technology. If it used to take 30 hours to build a chair, and technology allows us to make 30 chairs an hour, that extra value is in the cost reduction.

As technologies improve, there's more excess to go around. This tends to effect necessary goods first. (food and water became food and water and shelter, became food and water and shelter and plumbing and medication, became food and water and shelter and medication and education and insurance and etc etc.)

As you focus the efficiency of the resources spent, potentially everyone gets better off. I say potentially because many people hoard or always want more, which isn't bad, but it's not exactly the common good in some situations.

So look at your necessary time to have the abject minimum, a few thousand years ago you could spend a lot of time just trying to stay warm. Now you want an Xbox. Both require hours of effort, but now instead of having to spend 8 hours hunting or foraging, only half of that is for necessities, the rest is for luxuries and convenience.

Tldr. You only have 24 hours a day, think of this as 24 points. Food and water alone used to cost 8 of those.

As technology and partnerships/trade increase, food may net only 3 of those points instead. Maybe even less. Those extra points are how everyone gets wealthier.

This example assumes people will be efficient with their time and not live beyond their necessities. I know that's a silly thing to assume, but preferences skew the model at its base.

[–]McKoijion 1 point2 points  (0 children)

The Earth has limited resources. Economic growth comes from people finding out how to use those limited resources more efficiently. This happens in a few ways.

  1. Innovation. A farmer has to manually plow a field. The field they can plow is only a 4 acres big by hand. Now one farmer can plow 40 acres resulting in 10 times more food. Now they can use machines to plow 4000 acres so there is 1000 times more food. Now there are pesticides, fertilizers, GMOs, etc. Now one farmer can handle 40,000 acres resulting in 10,000 times more food.

  2. Specialization. Three people are farmers/bakers/cheese makers. They are jacks of all trades, but masters of none. So one person focuses on farming, another takes the wheat and makes bread, and another take the milk and makes cheese. By focusing, they can be 10 times as efficient as before. Then a fourth person can come along and become a chef who combines cheese and bread to make grilled cheese.

  3. Utilization. There are some resources on Earth that are very rare, like gold. Others are very common, like oxygen. There are some resources where there aren't enough people alive to make full use of them. For example, in the above example, if there are only 3 people in your town, there won't be a fourth person to become a chef. So population growth has made people more money because fewer resources are going untapped. This a problem for resources used unsustainably, but is otherwise good.

[–]PrisonIsLeftWgUtopia 0 points1 point  (0 children)

The extra wealth comes from increased production (i.e. goods, services, etc).

The amount of money in the economy is not necessarily related to the amount of wealth in the economy or how "rich" everyone is.

[–]lordzeel 0 points1 point  (0 children)

A common representation of economics is "pieces of pie" or a "zero-sum" game. The notion is that there is a certain amount of wealth in the world, and it is divided (unevenly) among all people. If if someone gains more, it must have come from someone else. If I get $100, someone else necessarily lost $100. This model would tell us that everyone can't get richer, and that the extra money can only com by taking it from someone less fortunate.

Luckily, none of that is actually true. In reality, wealth can be generated - we aren't limited to slices of one pie, we can just bake more pies. We can invent new flavors of pies. We can come up with food that isn't pie, or even pie shaped, at all!

You see, money is just a physical representation of the concept of value. We can get more money by simply increasing value. And increasing value is, actually, quite easy.

Consider this: in mathematics, we call the result of addition the sum and we call the result of multiplication the product. Now consider a factory, what does it do? It produces things, it doesn't sum them. A product is more than the sum of its parts, it has a greater value than the stuff you put into it would have on their own.

A "zero-sum" game makes sense when you can only add and subtract - it says that for every addition there must be an equivalent subtraction. But when you throw multiplication into the mix, it all breaks down. The numbers can get bigger anyway.

And that's why "everyone is slowly getting richer" - it's because as we advance we can produce more value, and we represent that value with "money." The extra money (value) doesn't "come from" some place, it exists as a byproduct of production.

Consider the modern cell phone. Phones only cost a fraction of what they are sold for. The difference between the cost and the price is "profit" and it isn't a bad thing. Profit is that "extra money", it's the value that was created above and beyond the value of the materials that went into the phone. A lot of people wonder why this is okay, they think that selling the device for so much more than it cost to make is wrong, or unfair. But in reality, the price isn't about what it cost to make, it's about the value of the product. And the value is defined by people: what are they willing to pay?

Any time people will be willing to pay more, the product has more value. Even things with no practical purpose - like a designer watch that doesn't tell time any better than a cheap one - is more valuable because there is something about it that people want and care about. Something they value.

If I gain $100, it doesn't mean someone lost $100 (unless I'm a theif, or a con-man), it means they exchanged it for something that, at least to them, has a value equal to $100. Since money is just a way to represent value, the fact that they no longer have $100 isn't important, they still posses the same quantity of value they did before. But in another form. If they want more, thy can produce more. If not by their own hands directly, they can sell their time (employment) in exchange for value (money) they assisted in the production of.

As long as we can keep increasing the value of things, we can increase the amount of wealth that exists in the world. We can just keep baking more pies, and pizzas, a quiche, and anything else we can think of.

[–]Marshlord -2 points-1 points  (0 children)

The majority of new money is created by banks when they loan it to the people. Most of the money in an economy is not physical cash but rather just the digital funds you have on your bank account. When banks loan money they simply make a deposit of additional digital funds and place it in your bank account, money that you can use to buy goods or even withdraw as physical cash - they've essentially created money out of thin air.

They are allowed to create money out of thin air because modern banking operates under a system called fractional reserve banking that lets banks make bigger loans than they have deposits to cover for. The banks have a reserve requirement (set by the central bank) which is a ratio of how much money they're required to hold in reserves compared to how much money they're loaning to people. If that ratio is 10% and the bank's deposits are $100 then they're only legally required to hold $10 in reserves, even if that means they've no way of paying back the other $90 in case all the other customers want to make a withdrawal.

[–]Crooklar -3 points-2 points  (11 children)

New money is created by banks.

If you borrow $10,000 and have to pay back $12,000 over the life time of the loan due to interest.

$2,000 has been created by the bank and will eventually make it into the money supply.

That extra money and interest is just numbers on a screen.

[–]eggsplaner 0 points1 point  (10 children)

This is an incorrect explanation of money creation through lending.

In this scenario, the bank actually creates $10,000 of new money when it issues the loan.

When the loan is repaid the $10,000 is destroyed.

The additional $2,000 repaid is not 'new money', it has just come from elsewhere in the economy.

[–]Crooklar 0 points1 point  (9 children)

No it’s not.

100% of deposits are lent out to create loans, upto 90% - fractional reserve banking.

The act of lending out money backed by deposits creates new money in society.

momentary system

[–]eggsplaner -1 points0 points  (8 children)

In your original post you wrote:

If you borrow $10,000 and have to pay back $12,000 over the life time of the loan due to interest. $2,000 has been created by the bank

Implying that $2,000 of new money is created because of the interest payment. That is incorrect.

In your second post you wrote:

The act of lending out money backed by deposits creates new money in society

That is correct, and is the very point that I made. It is the lending that creates the new money, and $10,000 is created by issuing the loan, not $2,000 by paying it back.

[–]Crooklar 0 points1 point  (7 children)

At what point is the new money created? When the loan is opened or when the loan is spent or when it’s repaid? Or when the capital is spent You could argue at any point.

I would imagine it’s when the loan is created as that liability will be reported in accounts and used to base future earnings on - it’s one of the issues the credit card companies are facing at the moment.

If I deposit 10k and lend out 10k - no new money is created; If banks lent out money at 0% 10k would repay 10k ie no new money, ergo a net effect.

Imagine the first $1 in history is deposited in a bank, that bank lend out $1 with 50% interest; total repayment is $2 - it’s the interest on the loan that created new money not the repayment of capital. The capital is backed by deposits.

[–]eggsplaner 1 point2 points  (0 children)

At what point is the new money created? When the loan is opened or when the loan is spent or when it’s repaid?

When the loan is opened.

You could argue at any point.

I don't wish to argue, I hope to educate and inform.

If I deposit 10k and lend out 10k - no new money is created; If banks lent out money at 0% 10k would repay 10k ie no new money, ergo a net effect.

I assume you meant: "If I deposit 10k and the bank lends out that 10k ..."

Let us say that the bank lends your money to me. I now have $10,000, and the bank still has a liability to produce your money on demand, so you still have $10,000 in your account. If you and I both have $10,000, now there is $20,000, when before there was only ten. Half of this $20k is 'new money' - it didn't exist before.

This 'new money' is the bank's additional liability. It only exists for the duration of the loan. When it is repaid the liability is gone, and 'new money' is destroyed.

Imagine the first $1 in history is deposited in a bank, that bank lend out $1 with 50% interest; total repayment is $2 - it’s the interest on the loan that created new money not the repayment of capital

The interest does not create new money. It is the loan itself that creates the money.

To help explain, I will describe a scenario where the first dollar in history is loaned out and the loan is fully repaid. You should see that it is the loan that creates new money, the loan repayment destroys it, and the $1 interest paid on the loan just moves the ownership of the first dollar to the bank.

The first $1 belongs to the depositor.

The bank lends the $1 to a gold miner. Now there are $2 in existence. The depositor still has a dollar, and the miner now has a dollar. This is where the new money is created.

He buys a pick-axe from the store for a dollar. Now, the store owner has a dollar, and the depositor still hasn't spent the original dollar. Still $2 dollars

The borrower goes gold mining with his new pick axe.

Two years later, the loan is due, he has to repay $2 dollars. Luckily, he has managed to mine some gold. He sells gold to the store-owner, for a dollar, and he sells gold to the original depositor, for a dollar. (Since these are the only people who actually have dollars) Now he has $2 dollars, and he can repay his loan.

He repays the loan. The loan is paid off. and the 'new $1' is destroyed. The bank now owns the original $1, which it has earned in interest on the loan.

  • At the start, the depositor had $1, and the store owner had a pick-axe worth a dollar.
  • The loan issue created a new dollar.
  • At the end of two years, the depositor has gold worth $1, the store owner has gold worth $1, the banker now owns the original dollar, and the miner is richer by an axe and the additional gold he managed to mine.

I hope this helps. It is a tricky concept to understand.

[–]KeepThemmunsOut 0 points1 point  (5 children)

A few questions/thoughts

Is a bank lending the only way money can be created in a modern financial system or just the main one if the latter what are the alternatives ?

And is it not an exxaguration to speak of banks creating money willy-nilly when there is a central bank/government mint/federal reserve regulating the process and issuing money of their own ?

If we could somehow elliminate debt (not that debt is always a bad thing) would the economy as we know it ground to a halt and what would take its place ?

[–]eggsplaner 1 point2 points  (1 child)

Bank lending is the main way, but not the only way. The other big one would be quantitative easing.

"Just printing more money" is another method, but it is very unlikely to be used since it can easily cause more problems than it solves. e.g. Hyperinflation.

Banks don't create money "willy-nilly", as anybody who has been refused a loan will tell you. They are running a business, and writing bad loans will cost them dearly. They need to manage risks so that the returns from good loans are enough to cover the losses on bad loans.

You can't easily eliminate debt. Unless we can reduce everything to simultaneous exchanges we will need debt, and debt markers to keep track of it, i.e. money.

Suppose I mow my neighbours lawn in exchange for a pizza. Maybe I don't want the pizza right now. A debt has been created. He owes me a pizza. We trust each other and can remember this, but this doesn't scale. At some point, to keep track we start writing I.O.Us, e.g. "I owe you a pizza", then "I owe you something to the value of $5", and we have just invented money.

Maybe debt can be eliminated, but what happens to replace it is one for the philosophers.

[–]KeepThemmunsOut 0 points1 point  (0 children)

Suppose I mow my neighbours lawn

Technically you've created debt as soon as you've cut the first blade of grass unless your neighbour is literally standing there handing you pennies as you go.

[–]Crooklar 0 points1 point  (2 children)

That sounds like a leading question, so you should just tell me what you’re thinking.

The fed and central bank still create money through banking as they sell bonds which is essentially a loan/debt and a liability.

Quantitive easing involves buying debt from banks, the government raise capital through issuing of bonds, which is a “reverse loan” you give me 10bn and I’ll give you 10.1bn in 50 years.

It’s all the same method of creating money.

Debt in a capitalist system is a given, it’s what keeps the economy going.

[–]KeepThemmunsOut 0 points1 point  (1 child)

That sounds like a leading question, so you should just tell me what you’re thinking.

Not thinking anything. Its something Im kinda interested in but my knowledge is pretty spotty and anytime Ive tried reading up online I seem to come up against a lot of agenda pushers and even conspiricy theorists.