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Old 27-04-2012, 03:45 PM   #41
jon galt
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Join Date: Nov 2011
Location: OZ
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this my understanding on money as debt.

A person borrows money from a bank fe $10. and agrees to repay the the bank is up $5. I would say the borrower created the $5 through his earnings/source of income.
wealth of a country is produced through production.

The other part what I don't quite understand about debt creating money is,

Now that the person has taken this loan the bank now has an asset worth $15, but should the person not pay back his loan this asset would become worthless leaving the bank - $10. Making any share in the banks assets fall in value.

In what way is money created, rather than share prices rising.
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