It is common knowledge that banks do not lend out savings, but rather create money out of nothing when a contract is signed.
For example, the currency (account balances) for a mortgage does not exist until the contract is signed. Then a bookkeeping entry gives the bank an asset and the borrower a liability.
This newly created currency can then be used to purchase a house, materials, contractors, etc.
But there’s a catch …
Continue reading “Removing the constraint of currency for full employment”