Money and Monetary Economy
Money is needed by everyone and used by everyone both individually and as a nation. The monetary system is what provides is what countries use when determining international dominance and national control.
Talking about monetary systems, we cannot deny that since the 1700s when the Bank of England was founded and till date we have seen a lot of monetary battles play out. Those who have studied money and monetary systems properly have even confirmed that it is the strength of any empire. It has been seen that anytime an empire is about to reach its demise, the first thing that is affected is its currency.
If you check the world today, about 90% of the money in circulation are not physical money, rather they are bank money (digital cash). The less than 10% of the money in supply is made by the government and sold to banks at no interest which the bank pays for and delivers to the public. The government selling this money to the bank after issue the money is a way to make money and it is known as Seigniorage and the profit from the money sales to banks goes to the treasury.
When you keep money in your bank accounts, it is referred to as demand deposit which is banking term for credit creation. The majority of money around isn't physical, they are just digital and when this money move from one person to another, it is just a change in data base and it runs the economy. When banks give out loans, they do not lend out other people's money, instead they create the money and basically pretend that you have deposited a liability. When we save money instead of spending, it can lead to the economy shrinking and this can start a recession.
There was a time when there was a gold standard where the US dollars was backed by gold but soon it was ended because the US was printing more money than the gold they had in reserve and this led to the fiat money system which was backed by believe. The more the money being printed, the more money is available for business and there is money to purchase which leads to inflation.
We actually run a debt base economy and with more money comes more debt and this system distributes money from the poor to the rich. The private sector takes on more debt just like the government does and money is released to the public which is then used to pay salaries and create infrastructures and projects. The money paid to employees is then used to purchase things and then the loans are paid if they are, and another collected. At the end of the day, we live in a debt world and we are ruled by debt.