Money would be much easier to understand if everyone started thinking about 'access into the marketplace'. Especially, it would easier to understand the creation of money.
The essence of the creation of money is the gift of 'assess into the marketplace'. Ownership of money is ownership of tangible evidence that intangible 'access into the market' has been granted.
Owning money is like owning a ticket. If we characterized money as a 'ticket', we would intuitively understand that money embodies evidence of intangible 'assess into the marketplace'. Numbers on the ticket would represent the increment of access granted by each ticket.
We can still talk about money as we presently do. Just don't think of money as being debt or an IOU. Think of money as having the characteristics of a ticket which carries within it the intangible of access.
Of course, a ticket granting limited access into the marketplace would have a value depending, not only upon the numbers on the ticket, but upon the desire of people to access the marketplace. The more the desire, the more valuable the ticket.
If you or I made a loan of our own money, we would be intuitively thinking that we are delaying our own 'access into the marketplace'. Of course, we would like to get our money back from the borrower!
If we began talking about how banks create money, we would intuitively think that banks are granting 'access into the marketplace' each time they make a loan.
If we placed money into the bank for storage, safe keeping, and ease of transfer, we would intuitively think that those tickets would be there until we wanted to use them.
If we got to thinking about the bank possibly lending our deposit to borrowers, we would intuitively begin to worry. What if the bank loaned all of our deposits away so it came to pass that two people had claims on every deposit in the bank? It's better to think that every bank loan creates new money, so that we would have enough bank created money to repay every bank loan.
If we got to thinking about central banks, who own little money of their own, we would certainly wonder how they would differ from our local retail bank. It seems like when they made a loan, they would be granting vast access into the marketplace, the kind of access usually granted to governments in time of war.
In addition to bank created money, there is paper (or other construction) money. Paper money costs very little to make while conveying the same newly granted marketplace access as does bank money. The difference between cost of production and the value of access into the marketplace, is a gain to the creating owner and is called "seigniorage".
In the case of bank created money, it is easy to see that the borrower gets most of the advantage of newly granted access into the marketplace. This advantage is typically diminished for the borrower by the requirement that the tickets be returned, often enhanced by interest payments.
Accelerated access into the marketplace rather obviously increases the immediate demand for goods and services. This has a number of effects, both good and some not so good, which we will generally not go into here. We will notice that when we combine the advantages of early access, near zero interest rates, and extended or avoidable repayment periods, we are giving the borrower a very big economic favor compared to those citizens later in the sequential ticket ownership chain.
Analogies are a wonderful way to convey a concept. Calling 'money' a 'ticket' inherently conveys the concept that money embodies evidence of intangible 'access into the marketplace'. Many economic concepts become intuitively understandable when that evidence is prepositioned in thought patterns.
(c) Roger Sparks 2022