Marriner Eccles: No Debt Means no Money
on Tuesday, July 14, 2015Marriner Eccles Money Quotation saying The money and banking system relies on debt to finance the creation of new capital – without one the other doesn’t exist. Marriner Eccles said:
“If there were no debts in our money system, there wouldn’t be any money” — Marriner Eccles
Share the Marriner Eccles Money quote image above on your site:
Short Link to this Quote:
This quote from Marriner Eccles, former Chairman of the Federal Reserve, suggests that debt is integral to the existence of money in the modern financial system. Some key points in interpreting his perspective:
- Eccles implies that the lending of money into existence by banks, with the promise of repayment of both principal and interest, is what creates the money supply rather than it predominantly consisting of currency.
- He portrays debt as inextricably linked to the money supply, with financial institutions extending loans that introduce new money into the economy through deposit creation.
- Eccles’ perspective reflects the view that under fractional reserve banking, where banks only need to hold a small fraction of deposits as reserves, most of the money supply consists of bank credit in the form of loans rather than physical currency.
- However, reasonable experts can disagree on the appropriate structure and regulation of monetary systems given changing economic conditions over time.
Overall, the quote conveys Eccles’ observation that debt plays a fundamental role in modern monetary operations. But the best interpretation also considers this perspective alongside other reasonable stances in ongoing discussions around optimizing financial stability and economic opportunity through open debate and evidence-based discussions on complex issues related to currency, banking and public policy.
Birthday: September 9, 1890 – December 18, 1977