Explaining Clearing Drains and Currency Drains

Explaining Clearing Drains and Currency Drains

Here is a brief explanation on the nature of clearing drains and currency drains. The applications include part of how banks lend and settle account between each other. Put yourself into a context of the major banks and how they move their money between each other and...

Treasury Bills (T-Bills) and Interest Rates Summary

Here is some brief notes on the function and descriptions of these financial instruments. Treasury Bills (T-Bills) Government of Canada issues T-Bills in certain lengths: 98,182, 364 days – issued in denominations of $1000.00 – bought at a discount –...

Money Creation – Where Does the Money Come From?

How Banks Create Money continued One of our popular posts located here talks about ‘how banks create money’. You should read that link before this one as it is the necessary part 1 of this series on money creation. A lot of people think it’s a huge...

Where Do Banks Get Their Money? Fractional Reserve Banking

Do Banks Create New Money out of Thin Air? **Re-posted after the events of the credit crunch and 700 bailout packages, enjoy the read and learn how the banks got themselves in this mess.** Here’s the story. Banks keep on lending money, but where do they get it...

Q. Are there other ways to create money?

User artp posted this question in the forum and now it’s being republished here. As I read (mostly in The Economist) about the current economic crisis the more I become convinced it is partly a breakdown in the way our economy creates money. This leads to the...
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