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Money as Debt or Federal reserve system explained

Posted by Boris Agranovich on April 11, 2010 at 11:21
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Tags: ratio, deposits, loans, reserve, mponey
Modern money mechanics. Where does that bank credit come from? It comes from a different bank, who has borrowed it from another bank, who borrowed it from another bank, who borrowed it from the first bank, all holding 10% and loaning out 90%. That is how money is made out of debt.

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  • Boris Agranovich April 18, 2010 18:24
    Hi Phil, I think the answer to your question is quite simple. To be able to keep the equilibrium between the goods and services exchanged with available money you have to make an inflation correction which depends mainly on money supply (or on interest rate as they say).
    The video states that since 1913 the dollar has lost about 96% of its value. You can compare it with let’s a the price of a Ford car in 1913 and now. I don’t know exact figures but I believe these will be in very close correlation..
  • Phil Gadzinski April 18, 2010 12:55
    I have one question. The comment is "if there is no debt there is no money - or vice versa" and money is not required. Then how do you maintain track given fiat money is a store of value - how do you exchange goods and services evenly?
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