Banks Creating Money
Bureau of Printing and Engraving
My first childhood visit to Washington, DC included a visit to the Bureau of Printing and Engraving. There you can watch paper currency running off the printing presses, being inspected, sliced, and bundled. In the gift shop you can buy bags of shredded, rejected currency, or a sign that says, “The Buck Starts Here.”
Well, in addition to the Bureau, your local community banks also create money. They do it through the system of fractional reserve banking. I just recorded a video clip, available through my PlainSenseEconomics channel on YouTube. It’s for my Macro econ students. And you can watch it, too.
I teach principles of economics courses and a course in the economics of healthcare at Southern Oregon University.
