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“
In fact this is precisely the logic on which the Bank of England—the first successful modern central bank—was originally founded. In 1694, a consortium of English bankers made a loan of £1,200,000 to the king. In return they received a royal monopoly on the issuance of banknotes. What this meant in practice was they had the right to advance IOUs for a portion of the money the king now owed them to any inhabitant of the kingdom willing to borrow from them, or willing to deposit their own money in
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― Debt: The First 5,000 Years
― Debt: The First 5,000 Years
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If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.
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