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A comment on What is the Eurodollar System? (2020) [pdf]. Parent comment
Ultimately we all create money all the time because it is just a promise by of something in the future. .
The difference is that government can force you to obtain a particular promise via the taxing powers we give it at election time.
No trust required.
Banks then leverage that. For a dollar to be called a dollar there has to be a transitive clearance link to the entity that owns it.
Otherwise it is just a liability of the bank in question - like a share or bond
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Ultimately we all create money all the time because it is just a promise by of something in the future. .
The difference is that government can force you to obtain a particular promise via the taxing powers we give it at election time.
No trust required.
Banks then leverage that. For a dollar to be called a dollar there has to be a transitive clearance link to the entity that owns it.
Otherwise it is just a liability of the bank in question - like a share or bond