Absurdity Quote by Robert W. Hemphill
“If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash, or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless situation is almost incredible - but there it is.”
About This Quote
Source Essay: Economic Commentary, 2020
The quote explains that modern money exists only as bank-created credit, so without banks there would be no cash or currency, highlighting our reliance on the banking system.
In simple terms: Money is created by banks; without them, no cash exists.
Key Takeaway
Recognize the fragility of our monetary system.
Themes
economics
finance
dependency
systemic risk
monetary policy
Mood
concerned
thoughtful
Type
analytical
critical
When to use this quote
- personal budgeting
- policy advocacy
- financial education
- banking reform
Key Concepts
fractional reserve banking
synthetic money
liquidity
credit creation
Questions to Reflect On
- How does our reliance on banks affect economic stability?
- What alternatives could reduce systemic risk?
A Different Perspective
The analysis overlooks alternative monetary systems like cryptocurrencies or community currencies.
