Sunday, 21 December 2014
Print your own money.
This is in the Kansas City Fed office. I'm not sure exactly what's going on, but looks like you can print your own notes with a choice of currencies, amounts, patterns etc. This is all perfectly legal, as long as your DIY notes don't look too much like the country's central bank issued notes.
It's a good educational tool: it illustrates Hyman Minsky's point that "Anyone can create money: the problem is getting it accepted". I.e. if you printed your own dollar bills using the above Fed printing machine, your chance of getting them accepted in local shops would be effectively zero. In contrast, J.P.Morgan, Citibank, Lloyds, Barclays etc can in effect print money (though not in the form of physical notes). Having printed money (in book-keeping or digital form) those banks can then lend out their "notes". Those banks promise to swap their "notes" for central bank notes. But as long as those "privately issued notes" are lent to responsible borrowers, not too many people will demand the latter swap. Nice work for private banks.
Picture taken by Stephanie Kelton (I think).