Ever wonder how banks "create" money? It all started with 17th-century Goldsmiths.
✅The Vault: People left their gold with goldsmiths for safekeeping and got paper receipts in return.
✅The Swap: Soon, people stopped trading gold and just traded the receipts. Paper became money.
✅The Hustle: Goldsmiths noticed people rarely asked for their physical gold back at the same time.
✅The "Glitch": They started printing extra receipts and lending them out for interest—even though they didn't have the gold to back them up.
The Result: Fractional Reserve Banking was born. Today, banks only keep a tiny fraction of your cash on hand. The rest? It’s out in the world as loans.
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