Where does money come from?




see also Bank of England Quarterly Bulletin 2014 Q1:
There are three main types of money: currency, bank deposits and central bank reserves. Each represents an IOU from one sector of the economy to another. Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves.
!g Most money is in the form of bank deposits “created by commercial banks themselves.”

The proposal Ole Bjerg presents in the TEDx Copenhagen talk may work in Denmark, and it would be great if it does. Elsewhere the way forward may be to raise public awareness of the issue so that the political will can develop to call for bank deposits to be backed in full by reserves at the central bank – at the Federal Reserve, in the case of the US.

It is past time to revisit the so-called Chicago Plan of the 1930s and explore full-reserve banking.





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