this post was submitted on 20 Mar 2026
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Explain Like I'm Five
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Sounds like money is just "promises" with large institutions keeping track of who owes who what.
That's basically what it has always been once it moved away from the inherent value of the coins. Banks have always been promises, that's why things like the FDIC were necessary.
Even coins themselves have no inherent value. That's why they are used as coins, they aren't useful for anything else.
Before electricity became popular, pennies were made of copper. After electricity made copper inherently valuable, people started melting down pennies and using the copper for an actually valuable purpose.
Even gold has little inherent value. That's why people buy it just to let it sit on a shelf doing nothing. There isn't anything more practically valuable they could do with it.
Yeah, banks are required to keep x% I forget in reserves and they loan the rest out. Do the Taylor series and that's our money supply