Money is at the centre of all modern capitalist economies. Understanding its nature and origins is therefore of great importance. At the heart of Post Keynesian monetary theory is the idea of endogenous money.
This is opposed to the mainstream exogenous money supply theory: the idea that the central bank has direct control over the money supply and its growth. The latter theory is wrong, and I review that major points of endogenous money below.Social Democracy For The 21St Century
Endogenous Money 101
Lord Keynes
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Endogenous?
Yes, but only because of extensive government privilege are the banks able to successfully create much money: To wit:
1) Government provided deposit insurance instead of a government provided risk-free storage and transaction service for its fiat that makes no loans and pays no interest.
2) A government provided lender of last resort (e.g. the Fed).
3) Unnecessary borrowing by the monetary sovereign of its OWN money!
OTOH, common stock is an ETHICAL form of private money and requires none of the above.
F,
How do you go down to the corner drugstore and by a bottle of Deer Park water for 99 cents with common stock???
rsp,
F,
Common stock deals are already done all the time...
rsp,
F. Beard, banks (and others) created credit money back before deposit insurance and the central bank.
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