[p2p-research] What is the Origin of our Money Supply?

[Patrick Anderson]

Ryan Lanham wrote:
> borrow some money based on collateral or your capacity to repay
> (e.g. from income)...and voila...you've created money!

I understand the rules of partial-reserve banking cause even more
money to be created when I enter into a debt.

But that transaction cannot occur unless there was some 'base'
money to begin with - the 'reserve'.

I think it is called M0.  Who creates the M0 supply?


I'm trying to find out where our money comes from *originally*.

You may answer "a bank".  But then where did *they* get it from?

Someone or some institution is declaring (by fiat) that money
into existence, so *who* or *what* has that authority?

It is like a variation the game of Monopoly(R) where the person
"playing the banker" has an infinite supply of money that he can
create for himself whenever he likes without ever going into debt
and yet all the other players must borrow from him.

I'm not trying to question the morality of any banker as a person,
I'm trying to understand the strategy that has nations enter into
massive debt when it seems it could easily be avoided if those
nations would simply choose to issue M0 for themselves.

But since the question "Why do our nations borrow" is probably too
vast, I simplified to "What is the Origin of our Money Supply"?