Commodity Trade Mantra

Posts Tagged ‘Money Illusion’

The Concept Of Money And The Money Illusion

Guess what. Your money at the bank is not your money. A bank deposit is a loan to the bank, which should justify the fact banks only have a fraction of outstanding liabilities (receipts) in reserve. Let us examine this modern day practice of banking and the creation of what I call illusionary money. Simplified example: there is only book entry money, nowadays digital.

Beware the Money Illusion Coming to Destroy Your Wealth

The money illusion is a tendency of individuals to confuse real and nominal prices. The impact of money illusion is not limited to wages and prices. Central bankers use money illusion to transfer wealth from you — a saver and investor — to debtors. They do this when the economy isn’t growing because there’s too much debt.

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