The Financial-Industrial Revolution's Origin and Destiny | WHAT REALLY HAPPENED

The Financial-Industrial Revolution's Origin and Destiny

The financial revolution in England over 300 years ago overcame these limitations by vastly expanding the scope and function of credit. It established a credit system independent of savings and current resources, and it did so by institutionalizing the process of creating money “out of thin air.”

It takes a little history to understand this financial revolution—history that is not taught in our schools.

It was the goldsmiths in seventeenth century London that took the first step. Clients deposited gold with them for safekeeping, receiving in turn certificates of redemption. The goldsmiths discovered that only a few clients were likely to redeem their deposits at any given time. This allowed them to issue more certificates (as loans) than they actually had gold on hand to redeem them.

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