Richard Werner on How Banks Create Credit and Money

Video via http://www.youtube.com/watch?v=wDHSUgA29Ls

Description

"Banks have a pivotal function in the economy, they are the main creators of the money supply. In granting or issuing so called 'loans' to their customers they create the money that is essential to make the modern economy work. In fact says Prof Werner: 'here is no such thing as a bank loan' he says what happens is credit creation, when banks make the money (credit ) needed out of nothing.

He explains how the system works, whereby, from a miniscule deposit of funds a huge amount of money is created."

Malcolm Donald:

"For the simplest explanation of money creation watch the above video by Professor Richard A Werner. My thoughts are that this video should be the centrepiece of of the Positive Money website!

Professor Werner has also written two books on the demise of the Japanese economy.

• The Princes of the Yen. Japan’s Central Bankers and the Transformation of the Economy
• New Paradigm in Macroeconomics. Solving the Riddle of Japanese Macroeconomic Performance

These books are a fascinating read and explain how the Japanese economic performance plummeted following their hook up onto US/UK neoclassical economic theory." (http://www.positivemoney.org.uk/videos/)