7.  What’s Wrong with our Money? At the foundation of our financial system lies a critical but often overlooked characteristic: all money is created as debt. Every dollar circulating in the economy originates from a loan, whether it’s from commercial banks lending to individuals and businesses or from central bank actions, like purchasing government bonds. […]

Introduction The 2008 financial crisis was a wake-up call for central banks worldwide. In the face of collapsing financial institutions, central banks resorted to unprecedented measures like quantitative easing (QE) to stabilize their economies. These interventions averted immediate catastrophe, but they left central banks in a fragile financial position, with bloated balance sheets that would

Introduction In Chapter 2, we explored a concept that is gradually gaining recognition, even among economists: money is created as debt. Whenever a loan is made, new money enters the economy, and that money continues to exist until the debt is repaid. But this revelation is only part of a larger, more intricate picture. In

Introduction to Cryptocurrencies The story of cryptocurrencies didn’t begin with Bitcoin’s launch in 2009; its roots stretch back decades, grounded in a desire to create a form of money that exists outside the control of governments and central banks. The history of private digital currency is marked by earlier attempts that laid the foundation for

Commodity Money and Commodity-backed Money Introduction to Commodity Money Commodity money represents one of the earliest and most enduring forms of currency in human history.  At its core, commodity money is a medium of exchange that has intrinsic value due to its utility or scarcity in other applications.  This fundamental characteristic distinguishes it from modern

Money Creation, Destruction, Circulation, and Ensconsment Introduction: Four Types of Money In our discussion of fiat money in chapter 1, we didn’t consider different forms of money.  Joseph Wang, in his book, “Central Banking 101,” defines four different kinds of money: wallet money, bank account money, bank reserves, and treasury securities.  We are all familiar

Introduction to Fiat Money For centuries, economies were like engines starved of fuel. Commodity money—gold, silver, and other tangible forms—was always in short supply, limiting how much could be achieved. Too often, the bulk of available money was spent on consumables, leaving little to invest in the creation of wealth—those lasting, durable assets that drive