|
Debt money
|
|
Debt money is a form of fiat currency and is created through fractional reserve banking techniques, using the private banking system. Debt money is created when a new loan is approved and issued; it is destroyed when a loan is repaid. As stated by John B. Henderson, Senior Specialist in Price Economics, Congressional Research Service of the Library of Congress: “Money is created when loans are issued and debts incurred, money is extinguished when loans are repaid.” Debt money is, therefore, an inherently temporary and volatile form of money supply. If this is the predominant way of injecting money into the money supply, the economy becomes dominated by the debt-based monetary system and has the features and characteristics of this system of money supply. It is often referred to as "credit" or "credit money". See Also
|
| < Prev | Next > |
|---|
Main Menu
| Home |
| Articles |
| Search |
| Submit Article |
| Contact Us |
| Donate to Wikibin |
