In this episode of
Money Creation Explained, we are going to cover How Ordinary
People Can Create New Money Supply.
When you think of Money creation powers, you think of
governments and banks having these powers. Governments have
to ability to regulate currency worth and print money as
needed and distribute as they see fit. When the US
government needs more money in the economy, it borrows money
by issuing bonds and then orders the central bank to buy
those bonds by printing money. This means that the
government has to pay interest on every dollar that it
prints. At the time of publication of this episode (2022)
the US National Debt is $31.36 Trillion. From 1922 to 2009
the US National Debt grew to $16.43 Trillion in 87 years. In
the 13 years since 2009 the national debt has almost
doubled. Printing money causes inflation, higher taxes, and
many related issues.
Traditional banks create money in the economy through the
use of new loans such as mortgages, car loans, credit cards,
etc. Each time a new loan is made to a borrower, banks
create money by crediting those borrower’s accounts with a
bank deposit the size of that loan. Every new loan that a
bank makes creates new money into the economy by just
accounting entries on their computers. These numbers are a
‘liability’ or IOU from the bank to the customer. The
customer can then use their credit card, debit card, check,
or other forms of payment methods to spend those IOUs as if
they were the same as cash.
The IOU Notes platform extends the same power that banks
have in creating and generating new money into the economy
to all people and businesses. It can do this because when a
product or service is exchanged for credit, that business
extends a credit limit level that they determine, which is
based on their IOU Credit Score. Businesses who extend IOU
Credit to others are not laying out additional funds each
time a purchase is made like bank and credit card companies
do. Profits plus the original costs to produce goods or
services are delayed until the customer pays back IOU
Credit.
IOU Notes is a peer-to-peer credit and loan platform.
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Crypto
Currency Blockchain Coin
10 Million Max Supply Industry
leaders Bitcoin is
21 Million max supply
and Ethereum is unlimited.
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