🤔 Why Your Money is Actually Debt

Modern money is not a commodity — it has no intrinsic value 💳❌. It’s a promise, a claim on future payment, backed by law & trust ⚖️🤝. In short: money = debt 💵💫

🏦 Banks Create Money

When banks issue loans, they don’t move existing funds. They create deposits from nothing, recording a borrower’s debt as money 📝➡️💰.

🏛️ Central Banks Do Something Similar

They buy assets by crediting accounts with digital dollars 💻💲 that didn’t exist before. No taxes, no production — just pure monetary expansion. 🚀

💹 How Money Enters the Economy

New money flows through banks first. They invest it, asset prices rise before wages 📈💸. Eventually, inflation hits consumers, not capital holders.

💲 Understanding Bank Deposits & Cash

Bank deposits = debts the bank owes you 🏦💳

Cash = central bank liability 💵🏛️

Every dollar = someone else’s obligation, accepted as payment ✅.

⚠️ No Gold, No Guarantee

Money works because people agree to treat it as real 🤝💎. Loans create deposits, deposits become money, money repays loans — a closed loop ♻️.

👉 Key Insight

Money isn’t earned into existence. It’s borrowed. Repay a loan → money disappears. Supply grows/shrinks with credit, not production ⚡.

💡 Think of it this way:

Holding money = holding a signed promise 📝💰.

Cash → promise from the central bank 🏛️

Bank account → promise from your bank 🏦

You’re not holding value itself — you’re holding someone’s promise 😐

#FAQ 🧠 #Educational 📚 #Finance101 💵