The Great Divide – Understanding Banks Lending versus Banks Creating Money

In this podcast, the speaker discusses the ongoing debate between banks lending money and creating money. They challenge the belief that banks can only lend existing funds and provide evidence that banks actually create money to lend. The frustration of explaining banks' money creation is highlighted, as well as the importance of understanding the mechanics of bank reserves and lending. The effects of quantitative easing on inflation, interest rates, and asset prices are explored, emphasizing the need to consider factors like reserves and supply and demand dynamics.