This week January 28, 2017 on Money For the Rest of Us Plus we look at reasonable bid-ask spreads for newer ETFs. We also look at criteria for screening ETFs in an database. We explore why depositing funds in a bank account doesn't create money but borrowing money does. Finally, we look at the merits of the Eaton Vance Limited Duration Closed End Fund (EVV). … [Read more...]
99: Money Is Story
How money originated and why our relationship with money is driven by the stories we tell. Photo by Christina B. Castro In this episode you'll learn: How money originated.Why most money is virtual.Why the worth of money fluctuates both in the market and in our minds.How the stories we tell define our relationship with money. Show Notes The Wealth of Nations by Adam Smith Debt - Updated and Expanded - The First 5000 Years by David Graeber Your Story About … [Read more...]
94: How Money Is Created and Destroyed
How federal governments allow banks to create the vast majority of the world's money supply, and why that erodes the value of money over time. Photo by Generation Grundeinkommen In this episode you'll learn: What is financial intermediation.What is fractional reserve banking.How banks create money through creative accounting.How banks decide how much money to create through their lending decisions.How central banks try to control the amount of lending.Why federal governments can … [Read more...]
84: Money Is Trust
Why money requires trust and cooperation in order to function. What happens when trust disappears. Photo by Charles Wiriawan In this episode you'll learn: Why money requires trust and cooperation to function.How much money is there above and beyond coins and bills.What happens when individuals lose trust in digital money.Why countries must balance personal security against personal liberty.Why we need pockets of independence away from the financial system. Show … [Read more...]
MNY042 Plus: Federal Governments Outsource Money Creation to Banks
In this week's Money For the Rest of Us Plus episode, I explain that while governments can theoretically create money by spending that in practice they have outsourced money creation to banks. I also share a paper that helps explain much of what was covered in Episode 42. Finally, I discuss the rebound in oil prices, the strong jobs report and my bond portfolio. The episode length is 12 minutes. … [Read more...]
1: What Is Money?
How money is created out of thin air. Money is digits. It hasn't always been that way. Money used to be gold bullion or silver and later became coins and paper bills backed by gold. Now it's mostly digits. Just bits stored on a computer at your bank. The amazing thing about digital money is it can be created or destroyed simply by changing the digits. It is as easy for governments and banks to create money as it is to change the score on the scoreboard. In this episode, … [Read more...]
