Monthly Archives October 2009

A Simple Explanation of The Basic Monetary System

It is the month of August, on the shores of the Black Sea. It is raining, and the little town looks totally deserted.  These are tough times, everybody is in debt, and everybody lives on credit. Suddenly, a rich tourist comes to town. He enters the only hotel, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to pick one. The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher. The butcher takes the 100 Euro note, and runs to pay his debt to
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