đź’¸
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I O U some gold đź’¸
I O U some $USD$
I O U Nothing
“ The UK has 9,971,000 troy ounces of gold on the books. At 2012's prices, Britain’s gold supply constitutes roughly 4.05% of pounds in circulation.”businessinsider.com
a currency without intrinsic value
established as money by government regulation
“ Whoever controls the money supply can inflate away savings or crush house prices, but also prevent the Great Depression.
Whereas with anything of predetermined supply you just have to hope for the best. Reduced wages are harder to swallow than high inflation. ”
@richsilvo
3% is cash created by the government.
97% is credit created by banks.
bank deposits are an IOU from commercial banks to consumers.
“ When banks extend loans to their customers, they create money by crediting their customers’ accounts.”
Sir Mervyn King, Governor of the Bank of England
“ the essence of the contemporary monetary system is the creation of money, out of nothing, by private banks’ often foolish lending”
Martin Wolf, Independent Commission on Banking
For Bernard