Creation and flow of money and Bitcoin

 

When the economy needs a boost, banks issue money as loans to large businesses called corporations who have collateral in their factories, rather than to people who are already in deep debt. The corporations are run by CEOs whose mandate is to raise the value of the company shares. They use the loans to buy their own company shares, causing their price to increase. They do this rather than produce products and services knowing that people can not afford to buy. This makes the CEO successful and rich and the share holders happy. 

When the corporations go bankrupt, and default on their loans, the banks to go bankrupt. The government deems these corporations and banks as “too big to fail” and borrows money from the central bank and foreign investors to bail them out.

Banks flood the economy with money by lowering interest rates. When too much money chases too few goods, it causes prices to rise, the value of money to fall and people to stop saving and to fall further into debt.
https://andrewvecseybooks.blogspot.com/

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