How Banks Create Money Out of Thin Air

To understand inflation, you need to understand how money is created. Most people imagine a printing press,

giant machines printing dollar bills all night. But today, 97% of money is

digital, and the majority of it isn't created by governments, it's created by

banks. Here's how the process actually works, simplified, but accurate.

You go to a bank and ask for a loan. The bank checks your credit, they approve the

loan, they give you the money. But here's the twist, the money didn't

exist before you signed the loan. It was created on the spot, out of nothing with

a digital entry. This is called fractional reserve banking, and every time a new loan is issued,