Velimir Abramović / guest Ivan Poljanica

Category: Personal Development for Adults

An introduction to banking and monetary systems, together with proposed solutions for a fair monetary system.

Many assume that money is issued by national central banks. In reality, commercial banks create most of the money we use. How do commercial banks create money? For example, when you take out a home loan, the bank simply credits the requested amount to your account. From that moment, you owe the bank that sum, and as you spend it, the money enters circulation. In other words, your debt becomes money. This is why nearly all the money in circulation today is someone's debt. In addition, in our country the Croatian National Bank functions more like a currency exchange rather than a true central bank, since for every newly created kuna that enters circulation the state must first borrow in a foreign currency, namely euros. Each newly created kuna therefore carries an additional interest burden. A thorough monetary reform is therefore essential, so that the kuna serves as a genuine national currency rather than a voucher for the euro.

•