Source: Libertarian Institute
by Oscar Grau
“Leaving aside the events that made the current monetary system possible, banknotes that are printed monopolistically (currency) by central banks have purchasing power and serve as a general medium of exchange (money) for billions of people around the world. Such currencies (paper money), with no backing and with no non-monetary use, make up the monetary base upon which the fractional reserve banking system relies; first, through their privileged backing by central banks as lenders of last resort and second, through the reserve multiplier, allowing commercial banks to provide loans (bank money) beyond their reserves. The new funds created and lent by commercial banks via mere accounting entries perform the same function as money and therefore increase the money supply.” (02/04/26)
https://libertarianinstitute.org/articles/understanding-money-and-inflation-in-todays-world