When one ponders how money is made thoughts often turn to images of a press churning out millions of dollar bills.  The reality though is that money is made every time a loan is given.  The government is not necessarily the primary creator of money.  Banks are.  These days you may hear about the economy contracting or shrinking.  This simply means that there is less available credit and fewer loans are being issued by lenders.  Economic growth is directly tied to the ability of banks to give loans.

A few months ago a friend of mine sent me a link to wonderful video produced by Paul Grignon that explains in very simple terms what money is and how it is made.  While it may bit a little bit on the long side I found it extremely entertaining and informative.  No matter what your age or background I am sure that you will find it very enlightening. 

“Money as Debt”

If you are unable to view the video above click here.

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