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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Pogeu Mahone who wrote (130780)	2/20/2017 1:46:21 PM
From: bruiser98	Read Replies (1) \| Respond to of 220264

I've often wondered (since I learned a smidge about endogenous money a few years ago) whether the bank creates the credit money to pay the merchant in a credit card transaction. The bank just credits his account by typing in numbers. (Of course, done superfast by computer.) When you pay your credit card bill, you write a check to the bank.The bank deposits the money in its stash. So if you buy a $50 item with 10% sales tax, the bank credits $55 to the merchant's account. You pay the credit card bill with a check made out to the bank. The merchant makes some fraction of $50. The state/city makes $5 sales tax. The bank makes $55 plus transaction fees from the merchant.. Of course the bank still has a $55 deposit liability to the merchant, but the government is ultimately responsible for that.