New Money is Created with Promises

Ordinary people can help create new money by making promises. You constrain the future by making a plan, and a promise to keep to it. Money is created in response, because in making that promise you have created value. New money is created to represent that value. This is why it is possible for banks to fall apart when people don’t pay their mortgages back. Banks sell assets that are partially made of the future intents of borrowers. When borrowers do something other than promised, those as...