A more common sense
A more common sense down-to-earth explanation on how banking works and money "created".Quote:"Investment banks make enormous profits by skimming pennies off the top every time financial instruments are issued, traded, or retired. They may make mere fractions of a penny. But all those fractions add up.The big banks can double or triple these gains by working with money that they borrow overnight at very low short-term interest rates. They also lend these funds out to companies for a few days or weeks at a time on a variety of financial markets. Again, the pennies add up.The result is that investment banks are assembly-line money machines. They practically print money. They make profits that are inconceivable in any other line of business. ….. Contrary to popular perception, the bank bailouts didn't just give money to the banks. It lent money to the banks….When a recession hits and tax revenues decline, governments stay in business by borrowing heavily. Investment banks that levy a financial transactions tax must be able to do the same – or collapse into bankruptcy. That is how a recession turns into a financial crisis. Recessions occur in the real economy….The 2008 financial crisis came almost a year after the beginning of the recession in 2007. The financial crisis didn't cause the recession. The recession caused the financial crisis….'http://truth-out.org/opinion/item/22882-sixteen-for-16-number-7-make-the-bankers-squealOf course we can question the aurhors solutions..a regulated financial industry, but no need for any credit creation narratives to explain the real world of banking…its all about borrowing and lending.