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Money creation and the misconceptions
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Where does money come from? During the 19th Century the answer to this question was relatively simple: money was backed by gold, so the amount of money that the Treasury would print or mint was limited to the amount of gold held in the gold reserves.

Today, with the Gold Standard a distant memory, the process of money creation has been shrouded with misconceptions. Economic literature and textbooks note that money creation begins with the bank receiving the deposit, without stating the source of the deposit:

University of Nebraska (2012):

Each time a bank receives a deposit, it sets aside some of it to meet reserve requirements and may lend an amount equal to the remaining excess reserves. These loans take the form of new checking accounts for...