THE FUTURE OF MONEY Bernard A. Lietaer - library.uniteddiversity ...

arrangement has serious negative consequences for all participants,
including the US.
Lastly, emerging global non-geographic communities, such as the
Internet, foretell significant changes in the transnational currency
realm, which will be addressed later (Chapters 3 and 7).
'Fiat' money
The simple question 'Where does money come from?' propels us
back into the world of magic. Not only does money perform the act
of disappearing and reappearing, it is also, quite literally, created out
of nothing. To understand this process fully, we need to look beyond
appearances. At first sight, national currencies appear to be created
on the printing presses of central banks or, in the case of the US, the
Department of the Treasury. But this is not where money is created.
The rabbit that appears to come out of the magician's hat is not really
coming from the hat, either. If we want to know where the rabbit
comes from, we need to track its path through the magician's sleeve.
If you want Pounds 100 in cash, what do you do? You go to your
bank teller and ask for Pounds 100. He or she (or now with ATMs,
'it') will look up your account balance. If there is more than ~E100 in
your account, that amount will be debited and you will be given the
cash. if your balance is not large enough, you will get an apologetic
smile or some other message, but not the money.
Your money is really what is in your account, because the familiar
physical notes will be given to you on demand as long as there is a
positive balance on your account. Similarly the central bank will
deliver to your bank as many notes as it wants, but it will debit the
bank's account for the corresponding amount.