Central Banks, Financial System and Money Creation (and Deficit)

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In a market economy, the financial system gives money from positive savers (ie depositors) to negative savers (ie people in short supply who need credit to buy real estate, etc.). In addition, financial systems allow cashless payments. natural or legal persons.

The financial system holds the monopoly of services under the law. Only banks can accept deposits, only insurance companies can provide insurance benefits and the management of funds can be entrusted to a large bank rather than to a single investor.

How is money created?

In the past, the old Greek states were strong, partly because they were able to build their own currency. At the time of Pericles, the silver drachma was the reserve currency of that time. The same goes for Philippe’s gold coin from Macedonia. Each of these currencies could have been exchanged for a certain amount of gold.

Today, the Fed creates the euro and the euro of the ECB, that is to say money. Government regulation defines as a real currency a currency that has no intrinsic value. We must therefore accept it as real money. Central banks distribute coins and banknotes in most countries, accounting for only 5% to 15% of the money supply, the rest being virtual money, a record of accounting data.

Depending on the amount of money created by central banks, we are in crisis or in economic development. It should be noted that central banks are not public banks, but private companies. Countries have granted the right to spend money on private bankers. These private central banks, in turn, are of interest to states and therefore have economic and, of course, political power. Paper money circulating in a country is in fact a public debt. H. Countries owe money to private central banks and the payment of this debt is secured by the issuance of debt. The guarantee given by the State to private central banks for the repayment of their debts is the tax imposed on the population. The higher the public debt, the higher the taxes, the more people will suffer.

Presidents of these central banks can not be removed by governments and do not report to governments. In Europe, they report to the ECB, which defines the EU’s monetary policy. The ECB is not controlled by the European Parliament or the European Commission.

State or borrower issues bonds, ex. H. He agrees to have equal debts vis-à-vis the Central Bank, which, according to this hypothesis, generates no money and no interest. This money is lent by the accounts. However, the interest rate does not exist in the form of money, it is only the obligations of the loan agreement. This is why the overall debt is greater than the current or accounting debt. As a result, people become slaves because they have to work to get real money to repay debts from public debts or individual debts. Only a few can repay the loan, but the rest goes bankrupt and loses everything.

If a country has its own currency, as in the United States and other countries, it can “force” the central bank to accept its state obligations and to pay interest to the state. As a result, the bankruptcy of the country is avoided because the central bank acts as a lender of last resort. The ECB is another case because it does not lend to euro area member states. In the absence of a covered bond in Europe, countries in the euro area are at the mercy of “markets”, fearing not to recover their money by imposing high interest rates. However, the safest European bonds have recently gained ground, despite the differences between European policymakers, while the Germans are the main reason for not having this obligation, as they do not want national bonds to be a European obligation unique. Another reason (probably the most serious) is that the euro would be devalued as a currency and the German interest rate on borrowing would increase.

In the United States, things are different, the Fed lending money (USD) to the Fed, devaluing the local currency and devaluing its sovereign debt. When a currency is devalued, a country’s products become cheaper without reducing wages, but imported goods become more expensive. A country with a primary sector (agriculture) and a secondary sector (industry) can last

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