Post
Topic
Board Economics
Re: Finance Part I: Understanding the Parasite
by
johnyj
on 24/04/2014, 01:00:35 UTC

There is no secret regarding modern money creation, I like the explanation on Wikipedia:

http://en.wikipedia.org/wiki/Money_creation


That Wikipedia article is outdated and wrong.  
If you want to read an accurate explanation of money creation read this paper on money creation just published a month ago by the Bank of England's Monetary Analysis Directorate

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

Do you believe that banks will tell you the truth that they print money to buy assets around the world?

All the bankers, when they were asked about money creation (Where does your money come from originally), they immediately bring out the totally non-sense topic of fractional reserve banking, saying money were created out of loan and credit. Why? Because that will cover what is really happening and mislead most of the people right away into the wrong path, so that they will never find out the truth. The complexity of FRB and loan are already enough to lose many talent minds

Bitcoin community also learned the trick, it is this dialog they presented to bankers:
Banker: What is bitcoin?
Bitcoiner: Bitcoin is the first decentralized digital currency backed by cryptographic and the largest distributed hashing networks on the planet

If you follow this path, you will never understand bitcoin, just like if you follow the FRB path, you will never understand money creation  Wink