How is money created?

Jump to Last Post 1-4 of 4 discussions (6 posts)
  1. scoop profile image79
    scoopposted 12 years ago

    How is money created?

  2. LandmarkWealth profile image69
    LandmarkWealthposted 12 years ago

    Money (meanng currency) is created in the US by the Federal Reserve, and in other countries their corresponding central banks.  Often Recklessly I might add.  But real money is gold, which is the one universal form of money since the beginning of time.  For better or worse the creation of currency is not longer in anyway connected to the supply of gold.  So money creation is essentially arbitrary by the Gov't.   That leads to a complex discussion on the impact of creating too much currency and how it affects the buying power and impacts lifestyle of citizens.

    1. Greg Cremia profile image60
      Greg Cremiaposted 12 years agoin reply to this

      If gold is real money where can you spend it? How do you get change? I have been all over the world and have never seen anywhere you can buy something with gold.

    2. LandmarkWealth profile image69
      LandmarkWealthposted 12 years agoin reply to this

      Technically you can't as we are no longer permitted to mint currency anymore. It is not legal to do so. My point is the price of gold represents the appreciation or depreciation of a currency since the intrinisc value hasn't changed.Its the benchmark

  3. profile image0
    Elijahokelleyposted 12 years ago

    Money can be anything that arises in a market and is accepted as a medium of exchange. Today, money is created through Fractional Reserve banking which is helped greatly by the Federal Reserve in the United States and in other countries by their own central banks.
    Through fractional reserve banking, banks can loan out more money than they actually possess. Say someone deposits 50 dollars in a bank. If the bank has a reserve requirement of 10% then the bank can loan out 45 dollars. This 45 dollars is then placed in another bank. With a reserve requirement of 10% this bank can loan out 40.50. This process continues and effectively increases the money supply and is called the money multiplier which explains how money is created.
    I've written on what money is and the types of money as my latest hubs and plan on writing one about how money is created soon.

  4. Clarke Stevens profile image61
    Clarke Stevensposted 12 years ago

    To create money, you simply need people who are willing to accept it.  If you are the State of California, or the Bank of Siberia, and people are willing to accept your paper as payment, then you've created money.

    Money can be currency printed by a mint.  Or it can simply be an IOU, an electronic entry or a deposit listed on a bank statement.

    Banks have an interesting way of creating money.  Using the Money Multiplier, they can create much more money than a government's treasury can mint. I recently wrote a Hub about this.

 
working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://corp.maven.io/privacy-policy

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)