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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Commercial banks “create money” when they make loans.
They don't print banknotes: they simply create new digital deposits in a bank account. That money did not exist before the credit.
Yes, it is money, because society accepts it to pay, save and buy.
But it's also debt: Your account balance is a promise to pay from the bank, not necessarily cash held for you.
Many consider this system immoral because private banks can create money from debt, benefit from it first and cause inflation that reduces the purchasing power of the rest of the population. Furthermore, profits are often privatized while losses are socialized in crises and bailouts.
Most don't understand it because the financial system is complex, invisible and almost never taught correctly. Many people still believe that banks only lend money that others deposited, when in reality loans create new deposits and expand the money supply.
#Bitcoinforever⚡️
They don't print banknotes: they simply create new digital deposits in a bank account. That money did not exist before the credit.
Yes, it is money, because society accepts it to pay, save and buy.
But it's also debt: Your account balance is a promise to pay from the bank, not necessarily cash held for you.
Many consider this system immoral because private banks can create money from debt, benefit from it first and cause inflation that reduces the purchasing power of the rest of the population. Furthermore, profits are often privatized while losses are socialized in crises and bailouts.
Most don't understand it because the financial system is complex, invisible and almost never taught correctly. Many people still believe that banks only lend money that others deposited, when in reality loans create new deposits and expand the money supply.
#Bitcoinforever⚡️