How does money actually come into being? How is it generated? Many people (in the EU) think that the ECB prints this money and distributes it, but it is not that simple. Most of our money is digital booking records. Only a relatively small portion is physically present in the form of cash. The rest is so-called book money, i. e. money that is simply posted from one account to another.
All Money comes from debt
But where does it come from? How does such a credit or debt arise? Bernd Hückstädt, developer of Gradido, the Natural Economy of Life, uses the following example of the so-called Giral Money Creation in his book:
„If we assume that you and I open an account at any bank, we will both start with a zero balance. There is no money yet. Suppose I sell you something worth 100 €. You have a overdraft facility and transfer the 100 €, then you have 100 € debt and I have 100 € credit. Out of nothing, money has now been created that I can continue to use."
In principle, all money comes from debt, even if the central bank spends it. In total, credits and debts must always result in zero.
If you take a closer look, you will see that this system requires a growing debt for every growing asset. The compound interest effect intensifies this effect and accelerates the drifting apart. But even without interest rates and compound interest, there would inevitably be a gap between the two.
Murderous debt-money system needs wars and economic collapses for its cyclical reload
Every fortune is drawn from loans that another person has to carry. Where there are a few winners, there must be many losers who finance it. If the States were not to bear a large part of the debt, we would be even more aware of this.
Inevitably, the system must collapse every few decades. Since unlimited growth on a limited earth is not possible, economic collapses and wars serve as important pillars of the system.
What a monetary and economic system looks like, which is oriented towards living nature and eliminates these grievances, that is what the next Gradido post are all about.