M.S.

Money is created when banks loan it into existence. They simply make an entry in their computer and the money is “born.” Banks are able to continually make more and more loans because the people who previously took out loans were able to pay back their loans plus interest.

To illustrate: let’s say the bank loans me $100.00. I pay it back plus $6.00 in interest. I obtained the $106.00 by selling goods or services to people who had also taken out loans or who had obtained money from people who had also taken out loans. They used the money the bank loaned into existence to pay me $106.00 for the goods I sold to them. The bank then uses the interest I paid to them to make more loans to other people who then come back and buy more of whatever I’m selling.

Matt Savinar