Contrary to popular misunderstandings, well over 95% of all money in modern economies is issued initially as a debt by private banks, when they make loans or buy bonds. The money in your bank account corresponds to nothing physical, and simply represents the current numeric value of a promise from your bank to you, which can be transferred to other banks that participate in the same systems. The way the money is issued as debt, and then accumulates under the control of a minority of participants in any economy, creates a ‘monetary growth imperative’ in the economy. In other words, unless the banks increasingly issue new loans for new economic activity, then the money supply shrinks over time, as existing loans are repaid. Therefore, rather than achieve any stable size, any economy must keep growing.

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