Traders & Investors Club

We’ve seen that the textbook model of money creation suggests that there’s a base of central-bank or government created money in addition to which the commercial banks can blow up the total money supply by re-lending the same money over and over again.

We've seen that this model is actually completely inaccurate.

In this video, we take a look at the three types of money that we use in the economy and how there is no limit to how large the money supply can grow.

Is this situation sounding at all familiar?

Other videos in the series:

Part 1: Misconceptions Around Banking

Part 2: What's Wrong With The Money Multiplier?

For more information, please visit the Postive Money website.