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2024 | OriginalPaper | Buchkapitel

7. Spaceless Debt-Based Monetary Architecture

verfasst von : Armen V. Papazian

Erschienen in: Financing the Race to Space

Verlag: Springer Nature Switzerland

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Abstract

Having revealed a space blind financial value framework and mathematics, our discussion must now address our monetary architecture. This chapter is about how money is created. It is not an academic and historical review of money and money creation, but a factual description based mainly on Bank of England and US Federal Reserve publications. I have adopted this approach intentionally. The purpose is not to debate the many theoretical functions of money or the role of banks as financial intermediaries. My aim here is to demonstrate that money is created through debt instruments.

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Vorheriges Kapitel Spaceless Financial Mathematics

Nächstes Kapitel Calendar Time: A Muzzle in Space

Interestingly, during a Bank of England Future Forum on Money, in 2018, to which I participated in person, I was witness to this very discussion regarding the selection criteria of bonds used for monetisation, for money injection. I raised this issue personally with the then Governor Mark Carney (Bank of England 2018, 1:23:00), sharing the high-level insights that I discuss in this and previous books (Papazian 2023, 2022).

Note for clarification that while commercial bank loans create new deposits directly (new money), government and corporate bonds issued and sold in capital markets do not, they are purchased with existing money. However, bonds are used by central banks to create new central bank reserves (new money) through their monetary policy injections, or QE strategy.

Cryptocurrencies should not be confused with Central Bank Digital Currencies (CBDC) which are now being considered by the Bank of England and other central banks (Bank of England 2023a).

For a relative understanding of the numbers, note that the two highest consuming countries, China and USA, use respectively 7,805.65 TWh and 3,979.27 TWh per year (CCAF 2024).

Emphasis added.

Bank of England. 2018. Bank of England Future Forum on Money. Bank of England. https://www.youtube.com/watch?v=--8t85ipwvo&t=4973s. At 1:23:00 min. Accessed 12 May 2024.

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Titel: Spaceless Debt-Based Monetary Architecture
verfasst von: Armen V. Papazian
Verlag: Springer Nature Switzerland
Buch: Financing the Race to Space
Print ISBN: 978-3-031-73101-3

Electronic ISBN: 978-3-031-73102-0

Copyright-Jahr: 2024
DOI: https://doi.org/10.1007/978-3-031-73102-0_7