Money?

I was pondering about economics while waiting for the bus today.

Where does money come from?

That's a good question no doubt.

Let's see, was it from the banks? Or the government? Or the paymaster of projects?

I can see that money comes from offices that pay salaries. Customers to traders. But big money? Where from?

It's not really clear cut for the layman, but banks are the provider for large sums of money.

People who borrow money will use it as a salary, or to buy stuffs. And the receiver will then get the money.

Normal people like you and me. Be it an entrepreneur, an employer, or another, smaller banking institution.

The entrepreneur will use the money to set up a business, and buy materials. And then he sells product to break even and pay back the loan. Part of the profit goes to the government as tax.

To the employer, he pays the salaries of workers and buy materials for projects. The profit obtained from paymasters are payable as tax.

The smaller bank will use the loan money to issue more loans to get more profit, while money saved by depositors or investors will be used to finance investments to get even more profit.

Now where does money go?

Probably from the taxpayers to the government. From savers to banks. From employers to employees.

Now the main question is, where does money originate?

I would say that, based on pure logic, that money is what banks advises the normal people to use as a medium of trade, and it usually is given in the form of loan.

The loan will be paid back, with parts of salaries or parts of profit from business.

So money are the banks' tool. And we have to use it as well, coz the banks said so.

Errr story continues at a non-predetermined date.