ABSTRACT
The costs of money generation have shifted from the cost of precious metals to produce coins to the cost of a secure computer and communications infrastructure. New money can be issued and distributed only under the promise that it will be returned, that it can only be lent. An important point related to the generation and distribution of money that needs to be clarified which includes: money and financial assets come in pairs, assets and liabilities. The preserve of commercial banks, credit is responsible for the creation and distribution of money. Banknotes are the embodiment of power: an entity that has the power to create banknotes and to enforce their status as fiat money has power, not only economic power. Reserves are a type of money – a deposit or an entry in the computer system – at a central bank in favor of commercial banks within its banking system.
