How Banks Create Money

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Most of the money in our economy is created by banks, in the form of bank deposits – the numbers that appear in your account. Banks create new money whenever they make loans. 97% of the money in the economy today is created by banks, whilst just 3% is created by the government. This short video explains:

The money that banks create isn’t the paper money that bears the logo of the government-owned Bank of England. It’s the electronic deposit money that flashes up on the screen when you check your balance at an ATM. Right now, this money (bank deposits) makes up over 97% of all the money in the economy. Only 3% of money is still in that old-fashioned form of cash that you can touch.

Banks can create money through the accounting they use when they make loans. The numbers that you see when you check your account balance are just accounting entries in the banks’ computers. These numbers are a ‘liability’ or IOU from your bank to you. But by using your debit card or internet banking, you can spend these IOUs as though they were the same as £10 notes. By creating these electronic IOUs, banks can effectively create a substitute for money.

In the video below Professor Dirk Bezemer at the University of Groningen and Michael Kumhof, an IMF Economist explain where money comes from in less than 2 minutes:

Every new loan that a bank makes creates new money. While this is often hard to believe at first, it’s common knowledge to the people that manage the banking system. In March 2014, the Bank of England release a report called “Money Creation in the Modern Economy”, where they stated that:

Bank of England - Money Creation in the Modern Economy

“Commercial [i.e. high-street] banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created.” (Original paper here)

Sir Mervyn King, the Governor of the Bank of England from 2003-2013, recently explained this point to a conference of businesspeople:

Mervyn King, Governor Of The Bank Of England

“When banks extend loans to their customers, they create money by crediting their customers’ accounts.”

Sir Mervyn King, Governor of the Bank of England 2003-2013 (Speech)

And Martin Wolf, who was a member of the Independent Commission on Banking, put it bluntly, saying in the Financial Times that: “the essence of the contemporary monetary system is the creation of money, out of nothing, by private banks’ often foolish lending” (Article).

By creating money in this way, banks have increased the amount of money in the economy by an average of 11.5% a year over the last 40 years. This has pushed up the prices of houses and priced out an entire generation.

Of course, the flip-side to this creation of money is that with every new loan comes a new debt. This is the source of our mountain of personal debt: not borrowing from someone else’s life savings, but money that was created out of nothing by banks. Eventually the debt burden became too high, resulting in the wave of defaults that triggered the financial crisis.

Learn More


Bank of England - Money Creation in the Modern Economy

The Proof

The way that money is taught in universities is often very inaccurate. These papers and sources from central bankers and other experts show how the system really works.


How We Got Here

The laws that make it illegal for you to print your own £5 or £10 notes have been in place since 1844. But these laws have never been updated to account for the fact that 97% of money is now digital.


How Much Money Have Banks Created?

From the time when the Bank of England was formed in 1694, it took over 300 years for banks to create the first trillion pounds. It took them only 8 years to create the second trillion.

The Technical Details

Banking 101

Video Course: Banking 101

This free animated video course (total 57 minutes) explains how the modern banking system creates money, and what limits how much money banks can create.

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Advanced: All the technical details

This section covers all the nitty-gritty details of money creation by banks. We cover the three types of money, how balance sheets work, how central and commercial banks create – and destroy – money and what is wrong about the textbooks taught in universities. Read more…



Book: Where Does Money Come From?

“Refreshing and clear. The way monetary economics and banking is taught in many – maybe most – universities is very misleading and this book helps people explain how the mechanics of the system work.”

Professor David Miles, Monetary Policy Committee, Bank of England

Modernising Money Cover Web 300px

Book: Modernising Money

Why our monetary system is broken, and how to fix it. 

“Money is a social invention, indeed among the most important of all social inventions. At present the right to create money has been handed over to the private businesses we call banks. But this is not the only way we could create money and, as recent experience suggests, it may be far from the best one. Read this book with an open mind and you will understand why.”

– Martin Wolf, Chief Economics Commentator, Financial Times

Further Resources

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Papers and videos from:

  • The Bank of England
  • The International Monetary Fund
  • Lord Adair Turner, former chairman of the UK’s Financial Services Authority
  • Other professors and experts in the monetary system

Find out more

Stay in touch

  • Islam Hussen Pakhtoon

    I am the one teaching people that the way to destroy a society is to copy its wealth over and over again and amazingly britain is copying wealth but not the wealth of it enemies or so called enemies who I believe are not really enemies but innocent people, but are copying its own wealth. Britain is destroying itself, very strange for a country thats meant to full of people of intelligence. How hilarious a country that is destroying itself. Goes back to Islam, there is is no benifit in interest based transactions. This article is really hillarious I might store this for later references when I feel depressed.

    • Makanda62958

      Christianity used to prohibit interest, Jesus turned over the tables of the usurers in the temple. Islam could just as easily become corrupted after the wars against you conclude. Laughing because we cannot cry.

      • Wocca

        Fear not, Islam does charge interest, it’s just couched in other terms. A home buyer in the UK will pay roughly the same for his loan whether he uses an Islamic bank or a Christian Bank.

    • Wocca

      It may well go back to Islam but the fact remains that there is no Islamic country that creates the wealth that the world’s interest based transactions countries have. The wealthy Islamic countries that do exist are only wealthy because they sell oil to the countries that have interest based transactions.

      • Freeflight

        At least oil wealth is based on a real and tangible good, something you can touch and actually use.

        “Western wealth” on the other hand, slowly seems end up being just a big scam. Most of it based on fiat money and cooking the books, with no real economic gain or worth behind it.

  • Are You Kidding Me?

    Good grief. This is basic economics 101. There are no first year college economic students who dont understand that the banking system creates money through lending. And the central banks control the multiplier via the reserve rate. This is normal banking business and has been so for centuries. It isnt nefarious… it’s just good common sense. Duh.

    • Mira Tekelova

      The problem is:

      1) the ‘money multiplier’ is an inaccurate and outdated way of describing how the banking system works. Please see our video: “What’s wrong with the money multiplier model”.

      2) the type of reserve ratio that’s discussed in the textbooks has never even existed in the UK

      3) the central banks have actually very little control over the money supply.

      Please see:

    • Gunzo

      Well, it is nefarious because the excessive lending caused hiccuups and the bankers were not squeezed out and the federal govt had to step in. And we did not audit the Fed.

    • Malc Cowle

      They make the money – but working people, along with Mother Nature, create the wealth – including THEIR capital – i..e., the means of production. And if anybody can prove me wrong I will show my bare backside in Primart’s front window in Market Street, Manchester. It IS basic economics – time for you to read William Petty, the man Adam Smith plagiarised.

  • sharif

    Thanks.but I want to know more about that.any reference for this? Please
    Share this….

  • Paddy

    See old problems, what what is your solution proposition

  • sanba

    i cant understand this if banks create credit as loan and give it to me wont the credit be canceled when i pay my debt back so if thats the case how can the 97% of money be bank made?? for ex i take 200$ from the bank as credit wont i have to pay the 200$ in interest cancelling out the “nothing made credit”? and also can some one explain if banks create money why do they need deposit money ??

    • David Nicholson

      I don’t think so. Someone correct me if I’m wrong, but credit is money created out of thin air, and once that money is paid back it isn’t destroyed, but put back in the bank along with the interest as profit.

      • Wocca

        The original loan, when it is paid back, will no longer exist. The bank has to pay down the original loan with the money repaid to it by it’s customer.

        • Wackfuk

          Not so sure about that. Doesn’t clarify that in the wiki article. The whole point is to create new money to counter act deflation.

          • Graham Hodgson

            The reason bank-created money has grown to 97% of the money supply is that banks create new deposits by creating new loans faster than borrowers destroy existing deposits by repaying existing loans.

            Almost all of the interest collected by banks is paid out again by the banks in the form of interest to depositors, salaries, dividends, bonuses and purchases of goods and services by banks.

          • Wackfuk

            So when a bank loan is repaid the money is effectively destroyed in the same way it is created when the loan was created. No? And central bank reels in the money supply by highering Interest rates which make loans less attractive to customers and so slowing down the amount of new money a bank can create.

          • Steve Beckle

            Wackfuk — You are correct. I’m currently reading “The Creature From Jekyll Island”. How the U.S. Federal Reserve system was created. The author does a super job of describing how money is created via issuance of debt, since it’s fiat money with no gold backing. According to the author, if all debt (money that was created out of thin air) were paid back, there would be no money in circulation. Think about that…all money is debt in a fiat money system!! Debt issuance creates money. Debt retirement destroys (fiat) money. And the real crime is that the bank, which did nothing to produce the money it loans out, collects interest on it. They’re not lending out their own assets (cattle, cars, tools, gold). They simply play an accounting trick, create money out of thin air, and presto, the interest starts rolling in. Then, with fractional banking, they’re allowed to lend out 90% of that money elsewhere, and the ponzi scheme continues. Fascinating and eye opening. If I print money I get arrested for counterfeiting. Banks do it all the time and it’s legal.

          • michaelnola

            Actually, counterfeiters are less criminal than banks, because they don’t make any money off interest, as do the banks and they have to at least invest in ink, paper etc.

          • Carole Hubbard

            I’m not quite following this. If the bank lends out money, it goes into debt to lend that money, it takes a risk and for that risk it gets interest. If you default on the loan, the bank gets into debt and must make up the debt by interest it earns on other loans — right?

          • Carole Hubbard

            Are banks really responsible for pushing up the price of housing? The market determines the price of housing, so if there is a shortfall in housing, it pushes up the price. So you could say that the high price of housing is due to insufficient available housing.

          • JoeD

            You’re looking at one side, Carole. One could also say that a high demand for housing is what pushed up the prices, and that would be more accurate.

          • Sterling Michaels

            Everyone is missing the point that it is the “Central Banks” that created debt by issuing the loan to the LOCAL Banks when the Local Banks’ Customers borrow, as a renovations often, in which the bank issues a loan which bank must have one twelfth of the loan in deposits (Your money and mine mostly)total long in their account (in the US) but since 1968 under the Bretton Woods Agreement, ( thanks to the Bank of England forcing the United States to either go off the gold standard or repay its debt to them, which would have bankrupted our country) the Federal Reserve does Not have any assets of THEIR ASSETS backing up this loan, and therefore it is you and I are repaying these loans without assets that the bank has to backup this debt and issuance of currency, that increases the net worth of the central banks like the Federal Reserve to ultimately of the money paid back to them, thus ensuring THEIR balance sheets that will ever increase and while the bank that loan see the money for sale your house is the title holder, ultimately it is the central bank that owns all of the assets of all of the banks, are assets of the Federal Reserve comment because if the default locally the feds take over the bank and its assets, and then sell it off to another bank to keep the illusion that they don’t really own those assets.

          • Geoffrey Bastin

            No. The bank didn’t have the money in the first place but only created it as a loan. Then the poor borrower becomes a slave to the system and pays the money lender interest for umpteen years whilst the lender laughs all the way to the bank.

          • Sterling Michaels

            Absolutely true! ;-)

    • Freeflight

      The bank will keep the credit and the interest, that’s also the most fundamental flaw of the system.

      97% of money is sitting around generating “new money” in the form of interest. But this “new money” isn’t really worth anything, after all no real economical worth has been created trough this interest. Nobody did build anything, nobody invented anything, but this money still needs something to “cover” it or else inflation will make it worthless.

      In the end, the rest of us (those that actually live of the 3% money that’s circulating real economies) have to earn less, work harder and spent even more so these insane amounts of money gonna keep their actual buying power.

      Because high finance and speculators do not invest their 97% of fake money into real economies. These 97% of money are not used to buy goods and pay services, these 97% are only sitting on bank accounts, generating new interest.

      The real economies are missing this money in the form of buying power, yet they are responsible for “keeping up” so the whole system doesn’t break together under it’s own weight.

    • mo

      Imagine a bank loans 10 people $1 and charges all of them 10% interest. All of them need to pay back $1.10. Where does the extra dollar come from?

      • Wackfuk

        The peoples pocket.

      • Ross Lewis Flynn

        from another loan with more interest, and then agian and again and again. thats why there is alway more debt than money.

      • some10

        The interest portion does not exist in the economy. That is why when borrowing (new money creation) stops, deflation starts. The money to pay the interest can only exist if they find borrowers to make new loans, at exponentially increasing speed. It is a system that is destined to crash. Check out kondratieffwavecycle .com to understand deflation that is built into the system just like inflation is.

      • JoeD

        If the bank held all the money then this might make sense. But since it doesn’t that extra dollar came from the people having jobs that paid them money, or investments they made.

  • Robert

    This is very misleading!
    Yes banks can credit the borrower’s account, which on the surface will increase the bank’s balance sheet but as soon as the borrower spend that money eg by a cheque to another bank, the bank will have to transfer an amount from their reserves to the other bank. There is no creation of money here its just an accounting entry.
    Even if the money stays in the same bank then the accounting entry will be to debit the borrowers bank account and then credit the beneficiary’s account. There is no new money here.
    Banks lending is limited to the amount of their reserves – reserve accounts or vault cash

    • Carl

      I agree this website is nothing more than propaganda. Base money can only be created by central banks

      • Robert

        banks can only ‘create money’ if they have reserves ie deposits from customers/wholesale markets.
        the way it is portrayed in this piece is that banks can create money regardless.
        As soon as the customer makes a payment from their account with borrowed money, the bank will need to transfer their reserve account money to the beneficiary’s bank.

        • Graham Hodgson

          This is a very narrow view of money and is not how banking works. It has long been known that the amount of reserves in existence has no bearing on economic activity. That is why all monetary authorities use some aggregate of the balance of customers’ deposits as their preferred measure of money. Banks create deposits when they lend to customers. This increases the measure of money. Those newly created deposits pass to other banks when the loans are spent. In the case of the vast majority of transactions, reserves are transferred only periodically and only after all deposit transfers for that period have been completed and net balances established. Reserves are just the accounting tokens used to keep all banks’ balance sheets in balance at period-end. But precisely because reserves don’t accompany payment, banks have to constantly scramble to borrow and rent out from the limited stock of reserves to meet their end-period settlement obligations and this is the destabilising mechanism which makes bank bailouts mandatory when it falters.

        • Frank

          Banks can ‘create money’ by leveraging ‘reserves’. If you put €10 in a bank the bank can then ‘create’ or lend to someone else +€100.. this gets out of hand very quickly and that’s where the problem lies. Banks are in it for the profit just like a lot of individuals are. A committee as these people propose, would (ideally) look after the greater good of everyone/the system.

  • Can

    I do wonder how international payment systems work. Say, US imports goods from China and pays for them with USD. What happens if Bank of China intervenes? What happens if it does not? Can you help me go through this transaction through use of balance sheets of economic agents?(Importer, Exporter, Chinese bank, US bank, FED, Bank of China) What happens to bank reserves in US? Thank you?

  • regnaD kicN

    Don’t forget “fractional Interest.” By law, banks can lend up to 10 times their worth. If the loan isn’t repaid, the banks still have next to nothing to worry about as the other many fractional interest loans will make up for the shortfall (and also being able to write off the debt) not to mention being bailed out by the federal government if things really get bad, like in the 1986 S&L crisis or the 2008 financial meltdown. It’s a win-win situation for the banks, but for the average citizen it’s a lose-lose situation due to interest and inflation eating up their paycheck’s value.

  • Rubicon

    This is a bit naive and not actually true in some areas. Central banks are not owned by the governments, they are in effect privately owned banks which loan money, created out of nothing, to the government at interest. A large proportion of your income tax goes to pay the interest on the national debt (money borrowed from the central banks) and hence into hands of those who control the central banks. All western nations and most of the world is in this system, this book is a good explanation of this system. High street banks do indeed create further money out of nothing at interest (10x bank deposits), but this goes further. These loans, once paid into another bank after purchase something with this money, allows the receiving bank to again lend 10x on the original loan and so on massively increasing debt levels. The money for interest payments is however never created, so the only way the system can survive is by creating more and more debt to pay the interest. In a recession, there is less money created (new loans) for interest payments, therefore re-possessions and defaults ( bankruptcies ) increase dramatically and the banks take control of real assets, with money created out of nothing. This all carries on until the inevitable collapse of the system. This is just a brief summary.

  • n k prasad

    I am agreeing that money from banks by online, Debit & Credit cards are true money The black/fake currency will be controlled which is weakening the national money including the hard work of loyal citizens. Every moralized citizen has to fight against the financial Terrorism.

  • Nick Hoggard

    Is an IOU for £1 really worth the same as a £1 note?

  • radovas

    i see such difference of opinions and such knowledge in here, that it would be wonderful, if your beautiful minds, should work toward the essence of the problem…to have a biggest percentage of “production” capital and lower one on “investment” capital…to make money more real, more valuable, more accurate…more productive…that is the bottom line….

  • Sky Wanderer

    Parts of a recent publication by the Bank of England:

    “Of the two types of broad money, bank deposits make up the vast majority — 97% of the amount currently in circulation. And in the modern economy, those bank deposits are mostly created by commercial banks themselves.” (p.15)

    Most of the money in circulation is created, not by the printing presses of the Bank of England, but by the commercial banks themselves: banks create money whenever they lend to someone in the economy or buy an asset from consumers.

    By definition, ‘buying’ assets from created, new money is theft.

  • Ben

    In the Original paper, The third bullet point at the top of page 1 says…

    The amount of money created in the economy ultimately depends on the monetary policy of the central bank.

    How strongly can this be disputed and what are the chances of convincing the BoE to stop using such language assuming it can be shown to be false

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  • Arriemoller

    Don’t worry guys, bitcoin will fix that.

  • Peter Martin

    The crunch issue for all banks is that they do have, from time to time, to back up the money they have created supposedly “out of thin air” with real government money. The mistake which I think many are making is to assume that bank created money, created when loans are issued, stays in the economy until that loan is repaid. It doesn’t.

    Suppose I borrow £1000 from my bank. The bank edits my account to show that extra money. So its just been created. “Out of thin air”! Fair enough. I then write out a cheque for £1000 to the taxman. The taxman puts the cheque through the clearing system but he doesn’t want bank money, bank IOUs, he wants real government money. The bank supplies this from its reserves. At the same time it edits my bank account downward so eliminating the newly created “money”. I still owe the bank £1000.

    This would be relatively unusual but possible. A more usual scenario would be that a bank would lend money to a business, say a builder, who would hire bricklayers, joiners, buy raw materials etc for his building project. Every transaction would attract the usual government taxes. Income tax. VAT, NI contributions, Corporation tax etc. As the newly created money is spent and respent it rapidly dwindles until there is nothing left. It has nearly all gone to the government’s taxman who doesn’t want the money as it was originally created. He insists that those banks convert their IOUs to government IOUs.

    • Carole Hubbard

      Instead of saying “the bank makes money out of thin air” when it creates a loan, why couldn’t you say that the bank forwards money on a person’s behalf and charges them interest for the service? The bank takes the risk on who it lends money to and if the lender defaults, the bank needs to make the money up from good loans that are repaid.

      • Carole Hubbard

        I’m not trying to justify or rationalise the banks’ behaviour, just trying to work it out. After all there are other things wrong with the system like speculation, money laundering, the Libor exchange rate — not just bank lending.

      • Peter Martin

        Carole, Yes you’re right. The bank does need to make up bad loans from the proceeds of good loans. It needs to pay its staff and run its premises etc. It can’t just “create money from thin air” to do that.

        The bank isn’t doing anything different than a casino does when it issues chips. Except bank money is digital. Those chips could function as money outside of the casino too providing that everyone had confidence the casino was going to not default on its obligations.

        So is positive money going to stop casinos issuing chips too? Are we going to see stacks of real government coins on the blackjack tables instead?

        If not, why not? The casinos are creating money too, if not from “thin air” then just bits of plastic! They obviously need to be stopped if Positive Money has its theory right :-)

        • Carole Hubbard

          The difference between a bank and a casino, is that a person borrows from a bank and knows beforehand what the risks are, with a casino its just pure luck. I can’t see why a bank can be compared to a casino which is gambling, whereas a bank provides finance.

          • Peter Martin


            You’re missing the point here, which is that the casino creates its own “money”. That would be still be true even if you didn’t go anywhere near the roulette tables but instead spent the chips in the casino restaurant.

          • Carole Hubbard

            Sorry, I don’t follow. People need to use money or “money” to pay for things. Why is this evil, and what is the alternative?

          • JoeD

            Where did Peter say this was evil?

            “Banks are supposedly the problem with society, but how?”

            No, they’re not. The government regulation of banking is the problem.

            “And what about all the other things such as speculation where a person merely trades on the highs and lows that naturally occur in economic cycles, what about the stock exchange where corporations keep their stock prices high through outsourcing all their expenses to the public, cost cutting without adding value. ”

            It would do you well to look into the reason for speculators. And how do companies outsource their expenses to the public?

            “What about the jobs that don’t do anything for society such as accountants, which people only need because the system is so complicated? ”

            People would still need accountants if the system wasn’t so screwed up.

            “What about the way electrical gear has built-in obsolescence, and what about cartels that set prices artifically based on what they can get rather than what their products are worth? ”

            Built in obsolescence is a myth. I would LOVE for you to point to one thing to prove this point. I’m always amazed by people’s belief in this cockamamie idea. I mean, ok, on the surface it seems feasible. But that’s for people who can’t think past step one. So business A produces a product that lasts one year. It doesn’t take a genius to realize that business B would then produce a product that lasts two years to out compete business A. And on and on. It’s absurd. Of course the biggest reason this myth persists is because the average person cannot conceive of the concept of economic trade-offs. Sure, you can have an electronic item that last twice as long, but it will also cost twice as much, may be twice as heavy, etc. etc. Plus, especially with electronics, people are constantly getting the newest, latest thing. Does it make sense to make DVD players that last 100 years when the entire concept of DVD’s will be gone fairly soon? Should you spend another $200 on an iPhone that will last slightly longer when more than likely you will be upgrading to a better version in a couple of years? I still have one of the old, original iPods. And guess what, it still works. Obsolescence my ass.

            Please, go ahead and name these cartels that set their prices higher than what the market dictates. Oh, you can’t? I’m so surprised.

          • Carole Hubbard

            Money is a form of barter. You could use pigs, bags of wheat, your time and skills, or money which everybody can use to barter with regardless of their situation. Some people might not need pigs, bags of wheat or a particular skill. Money is a convenient form of barter. To try and put casinos in the same category as banks due to the fact they “make their own money” is like saying rabbits are dangerous because they eat food and so do tigers. It doesn’t necessary follow.

        • JoeD

          But when a casino issues chips it has actual paper money to back them up. This would be more akin to 100% reserve banking.

  • Daniel Norman

    I was telling the guys at work about this and someone asked me the following question which I simply couldn’t answer, “If the banks genuinely create money out of thin air, why was the financial crisis caused by people defaulting on their debts? If the money was simply created from nothing, the bank would have no dependency on it and failure to repay the principal would have no impact.” Can anyone give a plain English answer to this for me?

    • Jim75

      When a bank (bank A) grants a loan it expands its balance sheet by increasing its assets (The signed loan document) and liabilities (the new deposit account, merely a book keeping entry in the real world) by an equal amount. If the customer draws down the loan by spending the amount of the loan with a trader with an account at another bank (bank B) the following would happen if this was the one and only transaction in the whole banking system that day. Bank A no longer has the liability of the origional loan but retains the loan document (asset). Bank B now has the additional liability of the new deposit in the traders account. To complete the transaction bank A must transfer the amount of the loan from its reserve account at the central bank to the reserve account of bank B. On bank A’s balance sheet which has contracted the loan document takes the place of the reserves it transfered to bank B. Bank B’s balance sheet has expanded by an increase in its reserve balance (asset) and its matching new deposit liability.

      When the customer repays the loan to bank A the loan document (asset) ceases to have any value and is replaced on the banks balance sheet by the resuling increase in its reserve balance (asset).

      If the customer fails to repay the loan resulting it being written off then the loan document no longer has any value but the bank never gets to replace the reserves it lost at he begining. This has to be coverd from the banks capital resulting in a real loss to the bank.

    • some10

      When you buy a home for a million bucks, bank creates 1 million dollars and puts it in your account. You write a check and buy the whole. The IOU transfers to home sellers from the buyer’s account. Now the bank owes 1 million dollars to the home seller who cashed your check. You promised to pay back3 million dollars (with interest) over the next 30 years. When you default, bank keeps the home which is now 500K and the bank still owes 1 million to the home seller. The bank is secrewed. FED comes to rescue and buys the home for a million dollars from the bank.

    • Laxon Kamau

      Automobiles+electricity+petrochemicals+cosmetics+air travel+sea shipping+diesel locomotives+construction machinery=crude oil.
      With a global shortage of oil, it does not matter how much trillions you got in your account. Oil is the key driver of the entire money market.

    • Shanghaiboy

      In plain English, why sub prime mortgages in the US caused a financial meltdown. When those guys got the mortgage from the bank, the bank simply created the money electronically in their system. Now the mortgage companies had deals with the banks, they would not receive cash, instead the bank would package that date as new capital that they pushed to hedge fund investors for investments in various parts of the world. Now what the hedge fund managers receive is also electronic money from the banks…which is basically those mortgage debts plus the expected interest. The hedge fund investors take that money(debt) and use it to invest in various properties, projects etc…they too hand it out as electronic cash and its to generate profit too mark you. u see the chain…a default happens, the bank has no liquidity and can’t balance their book and a chain reaction is triggered. This is as simple as I can lol.

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    A little while back, we were browsing through newsgroup, just like you are now and came across

    an article similar to this that said you could make thousands dollars within weeks with only an

    initial investment of $10.00! So we thought, “Yeah, right, this must be a scam”, but like most

    of us, we were curious.

    Anyway, it said that you send $1.00 though paypal to each of the emails stated in the article.

    You then place your own email address in the bottom of the list at #10, and post the article in

    at least 200 news groups. (There are thousands) No catch that was it. So after thinking it

    over, and talking to few people first, we thought about trying it. We figured what have I got

    to lose except $10.00, right? Like most of us we were a little skeptical and a little worried

    about the legal aspects of it. It follows the same regulations as the “mailed chain letters,

    which according to the U.S. Post Office (1-800-725-2161) is indeed legal! Then we invested the

    measly $10.00. Well GUESS WHAT!!? Within 7 days, I started getting money in my paypal account!

    We were shocked! We figured it would end soon, but the money just kept coming in. In our first

    week, we made about $20.00. By the end second week we had made a total over $1,200.00!!! In the

    third week we had over $10,000.00 and it’s still growing. This is now our fourth week and we

    have made a total of just over $60,000.00 and it’s still coming in rapidly. It’s Certainly

    worth $10.00. We have spent more than that on burgers and fries from fast-food chains!! Let us

    tell you how this works and most importantly, why it works? Also, make sure you print a copy of

    this article NOW, so you can get the information off of it as you need it.

    $$$ REQUIREMENTS: You must have a verified paypal account (premiere or business account to be

    able to accept payments). If you do not have an account you can go to and follow

    the instructions to set up a free account. In order to place the initial $10 into your account,

    you will have to verify your bank account with paypal (which may take a few days). Paypal is

    100% secure and is used by millions of people world wide.
    FPRIVATE “TYPE=PICT;ALT=Sign up for PayPal and start accepting credit card payments instantly.”

    STEP 1: Send, through paypal, $1.00 to each email on the below list. Make the subject of the

    payment “Email List” and in the comments, write “PLEASE PUT ME ON YOUR EMAIL LIST.” What you

    are doing is creating a service by this and best of all you are not giving your address to

    anyone you do not know … THIS IS ABSOLUTELY LEGAL! The email list:


    STEP 2: Now take the #1 email off the list that you see above, move the other addresses up (10

    becomes 9, 9 becomes 8, 8 becomes 7, 7 becomes 6 etc) and add YOUR email address (the one used

    on the paypal account) as number 10 on the list.

    STEP 3: Change anything you need to, but try to keep this article as close to original as

    possible. Now, post your amended article to at least 200 newsgroups, message board. (We think

    there are close to 32,000 groups) All you need is 200, but remember, the more you post, the

    more money you make – as well as everyone else on the list!


    Step #1) You do not need to re-type this entire letter to do your own posting. Simply put your

    CURSOR at the beginning of this letter and drag your CURSOR to the bottom of this document, and

    select ‘copy’ from the edit menu. This will copy the entire letter into the computer memory.

    Step #2) Open a blank ‘notepad’ file and place your cursor at the top of the blank page. From

    the ‘edit’ menu select ‘paste’. This will paste a copy of the letter into notepad so that you

    can add your name to the list.

    Step #3) save your new notepad file as a .txt file. If you want to do your postings in

    different sittings, you’ll always have this file to go back to.

    Step #4) Use Netscape or Internet Explorer and try searching for various newsgroups, on-line

    forums, message boards, bulletin boards, chat sites, discussions, discussion groups, online

    communities, etc. For example: you log on to any search engine like,,, then you search with subject like ?millionaire message board? or ?

    money making message board? or ?employment message board? or ?money making discussions? or ?

    money making forum? or ?business message board? etc. You will find thousands & thousands of

    message boards. Click them one by one then you will find the option to post a new message.

    Step #5) Visit these message boards and post this article as a new message by highlighting the

    text of this letter and selecting paste from the Edit menu. Fill in the Subject, this will be

    the header that everyone sees as they scroll thru the list of postings in a particular group,

    click the post message button. You’re done with your first one! Congratulations? THAT’S IT!!

    All you have to do is jump to different newsgroups and post away, after you get the hang of it,

    it will take about 30 seconds for each newsgroup!


    MAKE!! BUT YOU HAVE TO POST A MINIMUM OF 200** That’s it! You will begin receiving money within

    days! $$$$


    Now the WHY part: Out of 200 postings, say we receive only 5 replies (a very low example). So

    then we Made $5.00 with my name at #10 on the letter. Now, each of the 5 persons who just sent

    me $1.00 make the MINIMUM 200 postings, each with my name at #9 and only 5 persons respond to

    each of the original 5, that is another $25.00 for me, now those 25 each make 200 MINIMUM posts

    with my name at #8 and only 5 replies each, I will bring in an additional $125.00! Now, those

    125 persons turn around and post the MINIMUM 200 with my name at #7 and only receive 5 replies

    each, I will make an additional $625.00! OK, now here is the fun part, each of those 625

    persons post a MINIMUM 200 letters with my name at #6 and they only receive 5 replies that just

    made me $3,125.00!!! Those 3,125 persons will all deliver this message to 200 newsgroups with

    my name at #5 and if still 5 persons per 200 newsgroups react I will receive $15,625.00! With

    an original investment of only $10.00! AMAZING!! $$$$

    $$$$ When your name is no longer on the list, you just take latest posting in the newsgroups,

    and send out another $10.00 to names on the list, putting your name at number 10 again. And

    start posting again. The thing to remember is, do you realize that thousands of people all over

    the world are joining the internet and reading these articles everyday, JUST LIKE YOU are now!!

    So can you afford $10?? And see if it really works?? We think so? People have said, what if the

    plan is played out and no one sends you the money? So what are the chances of that happening

    when there are tons of new honest users and new honest people who are joining the internet and

    newsgroups everyday and are willing to give it a try? Estimates are at 20,000 to 50,000 new

    users, every day, with thousands of those joining the actual Internet.

    Remember, play FAIRLY and HONESTLY and this will work. Seriously, most people think this is a

    scam, but you actually do get thousands of dollars out of it, it is NOT another crazy stupid

    scam, if people follow through with sending out $10, it works!!!!!

    $$$$$ REMEMBER, IT IS 100% safe, secure,fun, adventurous and he who dares wins.Seriously you

    could spend your money much worse. Its a fun investement thats guaranteed to double your money,

    $$$$$(ps. just incase turn on spam filter on your email adress, if you get posted offers from

    third partys,) and thats it . simple.
    ps,ps. If some of the emails on the list dont receive payments or work.Just send to the few

    that work and youv spent even less.!! easy!
    Hope you enjoy.

    Thank you for using PayPal! Sincerely, PayPal Community .

  • Robert Walker

    This article speaks very briefly. They get money from customers in form of deposits at low interest rate. Then they lend the money to the needy at higher rate of interest. The margin is their profit. Watch a free webinar on how to make 10K a month without lifting a finger at

  • Anon Ymous

    Banks don’t create money because they don’t have the power to create money, that power is reserved for a citizen. Only YOU have the power to create money, and the banks know this.

    • Greenbacker84

      There my friend the total ignorance and evasion of so called ‘Positive Money’ is laid out for all to see. So long as they evade the fact we the people issue money via our promissory obligations and the catastrophic impact of banker imposed usury on the money supply they cannot be taken seriously. australia4mpe

  • Anon Ymous

    Everytime you take out a loan you’re giving the bank a license to create money that’s why the system needs you to sustain itself…

  • Parminder Singh

    Do all banks create money through this or just in few countries? Like I am from India but whichever documentary i watch it talks about banks in america or england. So do Indian banks also create money out of debt?

    • Greenbacker84

      All banks launder our promissory contracts in pretended loans, no exceptions. Research Mathematically Perfected Economy.. australia4mpe.

  • 0000451111

    Banks create money upon deposits, by using fractional reserves, if a bank buys a government bond on say a thirty day account, it has a deposit that it multiplies using fractional reserves that “fraction” is the government bond, it can pay easily using FR, and will have more deposits to lend from the bond even locking up the original bond in a vault, all within one month. The money thus “created” will become loans to borrowers from the bank, creating more deposits upon which the bank collects interest, if the bank uses a fractional reserve of say ten it can loan out nine times that amount, it can then charge interest that often ends up at three times the original loan over 20 years, making the amount now thirty times the deposit example; 9×3 plus deposit=30.

    The original amount of any loan is cancelled out upon repayment, but the amount of interest earning loans has increased, it therefore matters little that the “created” amount is canceled out, the method does explain however that a bank can actually start with no money at all, such is the madness of banking, and our compliance to such a scam

  • ben Banks are done soon

  • Joe Kimbell

    Good day, I am Joe Kimbell, getting a loan can be so challenging and stressful online, after so many months of trying to get a loan on the internet was fortil, so i became desperate in getting a loan from a legit lender online then i saw a comment from a friend called William Ken and he talked about this legit loan company where he got his loan fast and easy without any stress so he introduced me to a man called Mr Thomas Fandez who controls a firm called BRIDGING LOAN, So i applied for a loan sum of ($89,000.00USD) with low interest rate of 2%, so the loan was approved and deposited into my bank account that was how i was able to get my loan. everyone of you who is interested in getting a loan fast and easy to kindly contact them via email: {} to get any kind of loan you need today, they are ligit and good firm to take a loan, good luck.

  • Mrs Lady Jessica


    We are Christian Organization formed to help people in needs of helps,such as financial help.So if you are going through financial difficulty or you are in any financial mess,and you need funds to start up your own business,or you need loan to settle your debt or pay off your bills,start a nice business, or you are finding it hard to obtain capital loan from local banks,contact us today via email for the bible says””Luke 11:10 Everyone who asks receives; he who seeks finds; and to him who knocks, the door will be opened”.So do not let these opportunity pass you by because Jesus is the same yesterday, today and forever more.Please these is for serious minded and God fearing People.

    Your Name:
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  • some10

    When the money is paid back it is destroyed. That is why paying off debt is deflationary. Check out kondratieffwavecycle .com to understand money and deflation mechanics.

  • TheJ

    The truth is that, the banks did not create the money you did when you sign your name on the dotted line. They made a book entry by opening an account in your name for the amount you created/ signed for, and your promise to repay the loan made it legal to do so. in other words banks do not create money, the people do.

  • TheJ

    I am having an issue with the word loan, when it is use, it gives the impression that someone gave part or all he/ she had in the first place and asking that it be repaid back with interest. However, banks do not give any thing that were in their possession, the person who signed the Promissory Note is actually the creator of that money. The money that was used in the transaction did not come from the bank, although the transaction was made thru the banking system. I would suggest that a little bit of research in done concerning Promissory Note, and it will be a bit clearer.

  • KIM SOVAN | ( / | | / Google Search Domain 2015 / Tweet and Twitter @ki_oun / Email

  • Dave Gray

    Banks don’t create money gov does. They just act as middlemen between the gov and us.

  • KimOun945

    King Doom Of Cambodia Phnomphen.kmz
    Google Explore Global Mozilla Mini Corporation GoogleEarth 2014_2015 Tweet and Twitter @ki_oun / Email /Account Yahoo!kim_international ExportGov / | LinkedIn investment Corporation Banking Internet Banking BookNow | Email / | | Telephone (+855)12255079

  • William Lovel

    than cant someone in the bank than just adjust there numbers in there account if it ielectronic thus adding money to the account

  • Anthony Lucas

    Good day Loan Seekers here comes a Solution for your financial problems, We are a fully registered and certified loan firm, that offers secured and unsecured loans to individuals and companies at a very low interest rate of 2%. We offer long and short term loans.Our company has recorded a lot of breakthroughs in the provision of first class financial services to our clients, especially in the area of Loan syndication and capital provision for individuals and companies. We have brought ailing industries back to life and we back good business ideas by providing funds for their up start. We have a network of Investors that are willing to provide funds of whatever amount to individuals and organizations to start business and operations.We are a group of energetic and experienced loan professionals with thorough knowledge of financial markets.In general we offer mortgages, home loans business loans and bad credit loans commercial loans, start-up- working capital loans, construction loans ,car loans, hotel loans, are you in need of any type of loan why don’t you try Mr. Anthony Lucas and be free from financial bondage Our interest rate is 2% per annual repaid, our loan takes a maximum of 24 working hours,to get to all approved customers across the globe.You can contact us via Email: (

  • Anthony Lucas

    Good day Loan Seekers here comes a Solution for your financial problems, We are a fully registered and certified loan firm, that offers secured and unsecured loans to individuals and companies at a very low interest rate of 2%. We offer long and short term loans.Our company has recorded a lot of breakthroughs in the provision of first class financial services to our clients, especially in the area of Loan syndication and capital provision for individuals and companies. We have brought ailing industries back to life and we back good business ideas by providing funds for their up start. We have a network of Investors that are willing to provide funds of whatever amount to individuals and organizations to start business and operations.We are a group of energetic and experienced loan professionals with thorough knowledge of financial markets.In general we offer mortgages, home loans business loans and bad credit loans commercial loans, start-up- working capital loans, construction loans ,car loans, hotel loans, are you in need of any type of loan why don’t you try Mr. Anthony Lucas and be free from financial bondage Our interest rate is 2% per annual repaid, our loan takes a maximum of 24 working hours,to get to all approved customers across the globe.You can contact us via Email: (

  • Socrates

    In theory the banks work on the assumption that they’re using either their own money or a subsequent customers life savings to fund a loan or credit. However in theory all they’re doing is typing in a credit amount on your account with no money being shuffled anywhere.
    Which makes you think how can anybody get angry about bankers salaries if they’re just creating this money out of thin air?

  • Laurence James Howell

    I applaud any movement that explains in detail how money is created. If you do not understand how the legal system works and how it supports the corrupt banking elite then you will miss the point. Relying on professors who have a vested interest in keeping hidden corrupt practices in the money creating process will not get you very far in court.
    There is no loan arranged by the banks, they only return to you your own the form of credits. There has been an exchange of credit, nothing more. But by manipulating the legal system the bankers have been given a free ride by the Judiciary.
    The real targets are the Illuminati and the Freemasons which control the corruption that allows the banks to steal from the people.
    Within the Federal Fractional Reserve System there is a facility called the Multiplyer. this allows the creating bank to not only create the currency at source for the alleged loan but to increase the amount created by a factor of 10. This means that for every £iook applied for the bank get 10 times this amount.
    Not content with trousering £900k of your credit currency they then inform you that your alleged “Loan Account” has been set up and will you pay us 2,5 times what you have allegedly loaned over 25 years.
    I will leave you to do the maths. This is where inflation comes from. This is how and from where the currency comes from that has enabled the Banksters to blackmail all politicians in the power jobs and or buy up the opposition to their globalist plans and One World Government. Not for me.

  • Laurence James Howell

    Terminology. A mortgage is not the alleged loan. This is French for death pledge. and is the pledge of the property to secure the alleged loan. This is secured lending. Unless we are aware of and use the correct terminology then nothing makes sense and we will be forever kept in the dark.
    Just the way the illuminate like it. Wake up people.
    peace through love
    Laurence James Howell

  • Laurence James Howell

    Why would you trust anyone from the IMF?
    Christine Lagarde has shown herself to be a puppet of the Illuminati. She introduced the number 7 to the audience on 14 January 2014 and this event nailed the Occult message to the Illuminati notice board.
    Why she would expose herself in this way is not known but watch the Ytube video and decide for yourself.
    Whose agenda is she following? why would she ram the number 7 down peoples throats. Do your own research and stop being sheep.
    Start with the Illuminati and the truth will be revealed

  • Joe Best-Rotheray

    I’m confused.. When a bank “creates money out of thin air”, where do they get it from? A central bank? Surely it’s owed to someone, otherwise there’d be no risk to them when lending? Even if the borrower defaults, they could seize the asset (e.g. house) bought with the loan?

  • terry

    Jones Terry A Sincere and certified private money lender approved by the GOVERNMENT. I give out international and local loans to all countries in the world. Amount given out $2,500 to $100,000,000 Dollars, Euro and Pounds, available now are Business, Personal, House, Travel and Student Loans. Apply for a loan today with your loan amount and duration.Its Easy and fast to get. 4% interest rates and monthly installment payments.Check-out this great offer, Please For more information contact me on

  • Alton Stevens
  • Ideaguy

    Unlimited Spending Account are the answer for us all, and all you need is an Unlimited Legal Tender Check in the bank and you can always print Positive Money

  • jessie smith

    Hello Every One, I am mrs Jessie From Ohio U.S.A, I quickly want to use this medium to shear a testimony on how God directed me to a Legit and real loan lender who have transformed my life from grass to grace, from being poor to a rich woman who can now boast of a healthy and wealthy life without stress or financial difficulties. After so many months of trying to get a loan on the internet and was scammed the sum of $3,500 i became so desperate in getting a loan from a legit loan lender online who will not add to my pains, then i decided to contact a friend of mine who recently got a loan online, we discussed about the issue and to our conclusion she told me about a man called Mr Smith Morgan who is the C.E.O of Morgansmith Loan Company So i applied for a loan sum of (150,000.00USD) with low interest rate of 2%, so the loan was approved easily without stress and all the preparations where made concerning the loan transfer and in less than two(2) days the loan was deposited into my bank so i want to advice any one that needs a loan to quickly contact him via: ( he does not know am doing this i pray that God will bless him for the good thing he has done in my life.

  • jessie smith

    Hello Every One, I am mrs Jessie From Ohio U.S.A, I quickly want to use this medium to shear a testimony on how God directed me to a Legit and real loan lender who have transformed my life from grass to grace, from being poor to a rich woman who can now boast of a healthy and wealthy life without stress or financial difficulties. After so many months of trying to get a loan on the internet and was scammed the sum of $3,500 i became so desperate in getting a loan from a legit loan lender online who will not add to my pains, then i decided to contact a friend of mine who recently got a loan online, we discussed about the issue and to our conclusion she told me about a man called Mr Smith Morgan who is the C.E.O of Morgansmith Loan Company So i applied for a loan sum of (150,000.00USD) with low interest rate of 2%, so the loan was approved easily without stress and all the preparations where made concerning the loan transfer and in less than two(2) days the loan was deposited into my bank so i want to advice any one that needs a loan to quickly contact him via: ( he does not know am doing this i pray that God will bless him for the good thing he has done in my life.

  • Dave

    I don’t see how this is “creating money”. As soon as that money is withdrawn from the account the bank has a shortfall it would have to borrow to offset. Can someone explain this to me? I’m sure I’m missing something.

  • Arkadiusz

    One question: If a bank buys assets( such as government bonds, or shares from a company). Does then the money supply in the economy also increase? Like with taking a loan at a bank? Thanks

  • Carla Jones

    Do you need a loan, long term or short term? or you want to start up a business or pay your bills?

    write to Pastor Joseph a multi-International Lender on and i believe he will help you like he has done to me and couple of friends.

  • mark edward

    Hi, My name is Oscar and i just want to share my experience with everyone. I have being hearing about this blank ATM card for a while and i never really paid any interest to it because of my doubts. Until one day i discovered a hacking guy called Edward Mark of he is really good at what he is doing. Back to the point, I inquired about The Blank ATM Card. If it works or even Exist. They told me Yes and that its a card programmed for random money withdraws without being noticed and can also be used for free online purchases of any kind. This was shocking and i still had my doubts. Then i gave it a try and asked for the card and agreed to their terms and conditions. Hoping and praying it was not a scam. One week later i received my card and tried with the closest ATM machine close to me, It worked like magic. I was able to withdraw up to $3000. This was unbelievable and the happiest day of my life. So far i have being able to withdraw up to $28000 without any stress of being caught. I don’t know why i am posting this here, i just felt this might help those of us in need of financial stability. blank Atm has really change my life. If you want to contact them, Here is the email address . And I believe they will also Change your Life.

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