The reality of how money is created | LARS P. SYLL

A great article backed up with a challenging image

Everything we know is not just wrong – it’s backwards. When banks make loans, they create money. This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes.

Source: The reality of how money is created | LARS P. SYLL

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