Money

Money

How Leveraging Triggered the Financial Crisis

Leveraging triggered the financial crisis because it created a system of creating money that could not be sustained. Leveraging is the process that allows creative financing of real estate transactions. Some bankers at some of the world’s largest banks took a fundamental idea—the idea that money can be created on paper—and carried it too far.

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Are You Making More Money Or Losing Money When You Save It In A Bank?

The secret of making more money is contained in the word “currency.” Water flows in river currents. Money also needs to flow and circulate. Imagine you deposit $1000 in cash into the bank. Contrary to the images I had as a child, the bank does not take the cash and stash it into a vault somewhere. Instead, it keeps your deposited funds moving by loaning the money again and again. It creates profit from your funds while you earn interest.

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The Money Rules Of Three Ways Of Making Money

There are fundamentally three different ways to create money in the United States economic system. The first way to create more money is by fiat, which means “by decree.” Fiat means “let it be done.” Only the federal government can create money by decree.

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What the Federal Reserve Does

What the Federal Reserve does is to control the flow of money in the economic system. This means that the Federal Reserve plays an important role in one of the fundamental functions of government, which is to control the amount of money in the system.

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