I'LL BET YOU THOUGHT ---
When you finished studying Econ-101 in school, you should now know all there is to know about "money", and "the economy". That is what the money handlers want you to believe. It just ain't so.
Where did I learn the truth? In a roundabout way, I was given a project to write the software for a Trade/Barter Group.
The man [and his wife, who created the group] was a "Financial Advisor". One of those money experts who tell you how to handle your finances. He understood the inner workings of "finance" as it exists in the world today.
He did not name his "unit of transfer" a dollar; but rather, it was a "Trade Unit". [still one hundred cents]. It was thus easy to convert back and forth.
The members came from the private business community, where goods and services were available to any other member of the group. Sort of like buying into a cooperative. The casinos in Nevada have their own "currency", which is traded back and forth amongst the various entities, using a clearing house. [checks and bank drafts are treated the same way in the banking world]
When a business person joined the group, they listed the goods/services they had available, and paid a fee to the group owners. They were entered into the database and given "credits" for an amount in their trades account.
By using a credit card type of access, they could purchase goods or services from other members in the group, using their trade units instead of "money".
The seller, would call in to the home office with the card number of the buyer, asking for an authorization for the transaction [similar to credit card authorizations]. An entry was made in the buyer's account, putting a hold on the amount of the transaction, and a tentative credit was entered in the seller's account, showing a potential addition.
When the signed sales slip was received at the office, the transaction was finalized.
The owners took a percentage of the transaction [again, like the credit card companies] and it was credited to the owner's account.
This was the "method" put forth that the owners earned their credits. After all, they were not in this for their health. And, being the understanding owners that they were, they realized that there would be times when a buyer wanted something that cost more than they had in their account; hence they had a loan system in effect. If the buyer was "good for the payments", they would advance credits to their account. This had a fee attached, of course, (since we are not in this for our health, remember?)
My program took care of all the transactions, and calculated all the fees, and made out a statement at the end of each month. Everyone knew just where they stood in the system.
What was left unsaid was, the owners had the computer where they entered the transactions, and they would sometimes need to adjust their own account balance, so they could continue to operate. "Credit our account with another thousand units" became the order of the day.
Now, where did this gentleman learn this system. He knew the real operations of the banks. He just was adapting it to his own banking system, which is what it was, pure and simple.
Their system started out at their kitchen table, but they advanced to a nice office downtown, fully furnished, with a business phone and all the office equipment they needed. This becomes a very easy task when you are able to "credit our account with another thousand units" [read dollars]. It could just as easily be ten thousand.
Do you now begin to see why the banks have marble palaces in which to toil? With all the latest high tech equipment?
Did you also know that there is only one way in which you can "create" an asset? By signing a promissory note. You have just created an asset worth the amount on the IOU.
You cannot write a "check" for an amount if you do not have "funds" on deposit. The bankers frown on that practice, but they will gladly accept the promissory note and put it in their books as an asset. Do they ever repay you? They tell you they are "loaning" it to you, and you must repay them, with usury.
Incidentally, when the man explained why he was able to credit their account with units, he said, "We have to keep the pump primed". I guess that is the rationale used by the bankers as they spend their money into existence, too. They will never admit it to you, so it must be speculation on our part. I can tell you it does occur in the Trade/Barter group. And he learned the operation from the masters.