How does money get put into circulation?

Question

I'm not talking about old notes being replaced.

Answer 1

The Central Banks or the federal reserve ( a collection of central banks) issues orders to the government to issue bonds, money (credit) or other instraments to the other issuing banks.

Money is created out of thin air at the click of a mouse, lent into circulation and interest is then charged upon it.

the interest owed is never lent into circulation. so the total amount of 'money' (not just notes and coins, but digital money too) in circulation can never EVER repay the debts owed.

Answer 2

I don't know how it works in the USA but in the UK it's done through the Bank of England in England and Wales, The Clyde bank and the Bank of Scotland in Scotland, and it used to be the Ulster Bank in Northern Ireland but I'm not sure if that's changed or not. From these banks it's sent out to financial institutions that request it, and there are laws on the minimum liquid (ie cash) assets a bank, building society etc can hold. From the institutions it is supplied to the populace via ATMs or counters, and as the populace spends or saves it, it eventually works it way back to the institutions.If a particular branch gets too much cash reserve, it keeps its own percentage and the surplus goes back to the central reserve. Eventually old and worn money goes back to the mint, and the institution receives a compensatory ammount. Problems occur when people hoard money, and it's estimated that several million pounds is lost in change down the backs of settees and chairs. Every year all the money in circulation is accounted for.When accounting for this lost money it is called a "balancing item" and it has been many millions before.

Answer 3

After being made at one of the U.S. mints, it's distributed to the Federal Reserve, who then distributes to its banks.
There was a program on last week on the History Channel or Discovery that covered this.

Answer 4

The fed authorizes it to be printed and there it is. They really do have a license to print money. How much they make is part of what the fed decides to do at their meetings (money supply). Obviously, a lot of money added = inflation, so there is a downside to doing it.

Answer 5

They give it to three guys in Topeka, who spend it on hookers and light beer. From there it goes straight to crack dealers and from there to Bling-Bling suppliers who then dump it into the stock market and the Republican party bank account.

Answer 6

Good question!