I'LL PAY 21K SATS TO THE BEST ANSWER:
How do commercial banks “create money”? Is it money?
Why is it inmoral?
Why don't most people understand it?
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welp, i’ll take a stab at it…
when a bank gives you a mortgage, it doesn't pull that from existing deposits. it types a number into your account. liability on their books, spending power in yours.
functionally, it is real money but.. philosophically i beg to differ
banks earn interest on money they conjured while you spend decades repaying principal that never physically existed. every new dollar also quietly dilutes every existing one. you're not just repaying a loan, you're subsidizing the system that issued it which is immoral.. banks profit from a privilege that the public never granted..
most people don’t understand because financial literacy is conspicuously absent from public education, and that's by design, not an accident.
when a bank gives you a mortgage, it doesn't pull that from existing deposits. it types a number into your account. liability on their books, spending power in yours.
functionally, it is real money but.. philosophically i beg to differ
banks earn interest on money they conjured while you spend decades repaying principal that never physically existed. every new dollar also quietly dilutes every existing one. you're not just repaying a loan, you're subsidizing the system that issued it which is immoral.. banks profit from a privilege that the public never granted..
most people don’t understand because financial literacy is conspicuously absent from public education, and that's by design, not an accident.