Wikipedia. Just yesterday I was explaining my layman's understanding of econ, namely that money itself is zero-sum, so the prices of goods and services float on

Wikipedia. Just yesterday I was explaining my layman's understanding of econ, namely that money itself is zero-sum, so the prices of goods and services float on the free market according to how much people are willing to pay for them. Central banks inject money into the economy, inflating the economy, reducing costs across the board. This acts as a wealth transfer from wealth holders to wealth producers, by that I mean businesses. Normal inflation happens in a healthy economy, in an unhealthy one like this one, they dust off the lever known as QE. In a QE environment, the central bank injects money directly into the economy by buying up government bonds and other financial instruments. This coupled with fractional reserve banking means that the banks can make a whole lot more loans, flooding the system with liquidity so that money can start moving again. I had implied that QE increases the money supply, and so was corrected and told that it was actually the money base that was increased. On to Wikipedia I went to upgrade my knowledge. There I found out that the concept of money base is referring specifically to the amount of money banks can lend on using fractional reserve banking. So while nominally it's referring to the amount of hard currency in circulation, that 'in circulation' part is key, it's not just the amount of 'real' money out there. Economics shouldn't be mysterious, one's first stop should be Wikipedia to understand the boring concepts. If you want to know how it got that way, the Wikipedia articles on the history of the banking system are pretty good. It's dry, boring stuff. But you need to know it if you want to understand how the world works.