The story is told again and again that in earlier times goldsmiths realized that only a fraction of the gold deposited with them was being called up and THAT'S WHY they started issuing gold certificates that were virtually covered by the gold lying around idle.
Thanks for that detailed historical exposition, which puts some great color on my own "discovery" that the mechanics of "money creation, then and now" have not changed -- with the notable and obvious exception of the "standard money," which used to be gold but which is now paper, printed virtually at will by governments. It's hardly possible that bank credit creation would survive years of popularity in the marketplace if it were merely a scam. Good business ideas usually survive and thrive through the ages, and this basic banking technology, which benefits all parties to the transaction, is a good example. Scams cannot, by definition, be a "win-win."
Thanks for that detailed historical exposition, which puts some great color on my own "discovery" that the mechanics of "money creation, then and now" have not changed -- with the notable and obvious exception of the "standard money," which used to be gold but which is now paper, printed virtually at will by governments. It's hardly possible that bank credit creation would survive years of popularity in the marketplace if it were merely a scam. Good business ideas usually survive and thrive through the ages, and this basic banking technology, which benefits all parties to the transaction, is a good example. Scams cannot, by definition, be a "win-win."