Gregory's Server
The hardest thing to wrap my mind around when it comes to the economy is that only debt actually creates money. Someone's debt supposedly brings new money into the world.
Don't ask me how. It's all voodoo when it comes down to it.
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4 comments
@MyWoolyMastadon @sjolsen debt comes before money in fact, don't let that barter myth fool ya
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17 Sep 2023 at 1:54 | Open on novo-atlantis.null.media
@MyWoolyMastadon @sjolsen Your checking account balance is just a measure of the bank’s debt to you. When a bank lends (eg a housing loan), it actually creates debts in both directions: the bank’s debt to you is recorded as an increase in the balance of your checking account (“new money”). @MyWoolyMastadon @sjolsen I think the bank of England explains it quite nicely https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf |