| > Money is created when debt is issued and it is destroyed as the debts are repaid. fourier, fundamentally the quoted statement is wrong except in a very narrow niche. Its a overgeneralization that ignores core principles. There's no real way to clarify this in the span of a single post, there's a lot of fundamental material you need to be aware of. I'd instead refer you to a very solid book by David Graeber called Debt, The first 5,000 years; and then The Wealth of Nations & The Wealth and Poverty of Nations, for a more broad economic understanding (when things actually worked). Following those two, Bridgewater's Report (Ray Dalio) Big Debt Crises will give you sufficient background to understand what they are talking about and realize its just a narrow niche that ignores the forest for the trees. There are people that believe you can borrow from the future indefinitely with debt, and the price never comes due; Modern Monetary Theory is one such dogmatic approach and it ignores important distinctions about who decides what in trade, and also unfortunately many places reuse language in a completely different unrelated context which itself is misleading and corruptive. Start with the question, "What is money, what is it used for, and what requirements does it have to have, to be money". |
That niche being money and banking [1]. The comment you dismiss is correct: “Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.”
[1] https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...