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What it costs to hold money
the flow of money
Money in your hands is not static. Inflation, tax, fees and interest each take a share, and they compound. This is the stage of the flow you have the most control over.
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Where money ends up
the flow of money
New money does not spread evenly and stop. It pools in assets, because assets are what credit is secured against and what surplus money buys. This is why asset prices and wages have come apart.
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How money reaches people
the flow of money
Four channels carry money to households: wages, ownership, credit and transfers. They differ in reliability, in tax treatment, and in how close they sit to where new money is created.
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Where money comes from
the flow of money
Almost all money is created by commercial banks when they make loans — not by governments printing it, and not by lending out existing deposits. The central bank's own explanation says so plainly.
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How money actually flows
the flow of money
Money is created, distributed, accumulated, and drained — and most people only see the middle. A map of the whole circuit, and why where you sit on it decides more than how hard you work.