How Money is Created

Money is not backed by anything. when a bank actually makes a loan, that creates a deposit. And that is when money is created. In other words, banks sit there and go to their vault, hand you money. When you take out a loan, they just put a deposit in your account. Where do they get that money? Or they just simply change the digits in the account. How can banks do that? Well, they can because money is not backedby anything. That's the system of money that we set up. Now let's see what happens next.