Back to feudal times, when lending activities where almost forbidden in Catholic europe (all monotheist religions oppose lending activities see for instance http://en.wikipedia.org/wiki/Lord's_Prayer), most exchanges were made through barter, but many were through coins. Governments had the monopoly of coinage.
With capitalism, the banking industry appeared and with it the central bank held by the govt. The central bank had the monopoly of bills emission, but bills became an increasingly small fraction of total money supply.
Right now with electronic money around and all the deregulation that has been allowed, the central banks print very little money, most is created by private banks or other private agents on the financial markets.
THere was a time when money created out of nothing ran directly into the state's coffers, now it runs into private banks coffers. The money creation business has been effectively privatized. This contributes to the deficits and inequality.
2006-11-14
01:11:18
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