Talk:Monetary system
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Money Creation
[edit]Someone is pushing for conspiracy theory narratives. Every country has a law that authorizes central bank and commercial banks certain actions. Please, show me the law in any country in the world that authorizes of “creation of money” by commercial banks. I will give you a hint. The laws of United States can be found at https://uscode.house.gov/ . The laws of the United Kingdom could be found at https://www.legislation.gov.uk/ Please, stop spreading conspiracy theories.
The Cornell Law Review article used in references do not say anything about “money creation” by commercial banks. It says about earning money by lending and then using earned money to lend even more.
The Central Bank of every country DO control the volume of money in circulation and DOES issues (create) money. All money that is issued by central bank is physically printed/minted and stored either in central bank or in commercial banks. It is not frequently moved, because banks have agreements between each other. The physical money transportation is expensive and is not practical to transport every time someone made a payment. The physical money usually transported depending on agreement between banks. It could be on the monthly, quarterly, bi-quarterly or any other term basis. The commercial banks DO NOT create any money. Commercial Bank can only redirect the money flow from someone’s savings into circulation by lending. The commercial bank lending is limited by the amount of saving deposits it received, minus reserve rate set by central bank. For instance, if Joe Doe deposited in their savings account $100 and central bank set 10% reserve rate, then commercial bank can lend only $90 ($100 * 0.1 = $10 - the amount of money should be kept by the commercial bank as reserve as directed by central bank, $100 - $10 = $90 - the amount of money commercial bank can lend). Here is the link that shows how much physically printed US Dollars with denominations are in circulation. https://www.federalreserve.gov/paymentsystems/files/coin_currcircvalue.pdf — Preceding unsigned comment added by 158.247.71.115 (talk) 20:01, 8 October 2023 (UTC)
Redundancy
[edit]Not withstanding the rant above (which is terribly ill-informed and just plain wrong), the article does currently suffer from a significant redundancy in that the "debt based monetary system" section is largely redundant to the fiat money section. It is, however, better sourced. A significant copyedit to remove redundancies and remove unsourced statements from the fiat money section needs to be undertaken. I'd ditch the "debt based" label, though, as it comes entirely too close to terminology used by conspiracy theorists, who lack any real grasp on modern monetary systems. oknazevad (talk) 04:56, 14 June 2024 (UTC)