What is Money?
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"you as an individual can run out of money but society can never run out of money and if the government has gone into debt it is because somebody has accumulated money; it's always in balance" With regards to interest - Central Banks receive interest on the loans they make, and they also pay interest every day to the holders of money, so this balances out societally and does not take the monetary system out of balance. SUBSCRIBE, SHARE & START A CONVERSATION SOCIAL MEDIA: WEBSITE - wealtheconomics.org TWITTER - @garyseconomics FACEBOOK - @garyseconomics INSTAGRAM - @garyseconomics TIKTOK - @garyseconomics Spoken by Gary Stevenson GARYSECONOMICS Uploaded by Simran Mohan MOHAN MEDIA TIMESTAMPS 00:00 - Introduction to Money 01:00 - Does Money include Debt 04:00 - Money Creation 06:49 - The Total Amount of Money 10:34 - Our Concept of Money 13:24 - Governments & Money 15:59 - 2 Competing Concepts 18:00 - Inequality in Credit/Debt 21:50 - Money is NOT resources
What is Money? explains the concept of money as a social construct rooted in debt and credit, not physical resources. The video starts by challenging common misconceptions, arguing that money is not real resources and that wealth often exists as claims on others rather than tangible goods. It introduces a thought experiment where one person lends another money, highlighting how money can exist as cash in hand while simultaneously creating debt dependencies. The speaker emphasizes that money, debt, and credit balance in aggregate, and that every loan creates both money and a corresponding debt, keeping the system in balance. He then explains the role of central banks as the only entities that can create physical money, with commercial banks creating credit via loans that must be backed by eventual repayment. The narrative continues by contrasting two competing concepts of money, one that includes all debt and credit, and another that treats money as the sum of new loans, debt, and resources, culminating in a nuanced view of monetary balance and the distributional effects of debt on society.
Topics · economy · finance · monetary_policy · public_policy
Questions answered
- What fundamental truism about money does the video emphasize?
- The total amount of money and the total amount of debt in the economy always balance to zero; money is created through debt, so debt and credit are always in balance.
- Who is claimed to be the only entity able to create physical money?
- Central banks are the only entities that can create physical money; commercial banks create credit through loans rather than physical money.
- How does the speaker describe the effect of government debt on ordinary people?
- Government debt increases the money held by some individuals (often the wealthy), which can raise asset prices and affect living standards for the broader population.
- What is the relationship between money, debt, and credit in the system according to the video?
- Where there is money, there is debt, and where there is debt, there is money owed to someone else; the system is balanced at the societal level.