Mnementh said:
What has the government to do with it? You don't understand, money is created by the banks for debts. The government isn't involved. And mostly the banks create money by giving out loans to each other. So bank A wants a credit over 1 billion from bank B, so bank B creates the money in the books and it is noted in the account of bank A. Afterwards bank B asks for a loan over 1 billion from bank A, so the money is created by bank A and noted in the account of bank B. They cannot create money completely without borders, but the boundaries are very weak. The banks make winnings with the interest-rates, so they are interested in creating more financial products that they can ask interests for. That lead to the financial crisis. |
Government "shouldn't" have anything to do with it. But Central Banks (not the same as the banks you are referring to) have everything to do with it. Banks cannot lend money which they don't have. No, they can't just "create" money. Central banks do that. It is true though, that there is not enough currency in most banking systems for the actually cash to be completely withdrawn, as much of it is digital fantasy. However the central banks are the ones that put it into the "system".