>> Can a government create "real money" in an electronic form? Yes, so can banks, and so can you. That's how most money is created. Most money is an entry in a

>> Can a government create "real money" in an electronic form? Yes, so can banks, and so can you. That's how most money is created. Most money is an entry in a database saying that someone owes something to someone else. If you walk into a bank with $1000 and open a checking deposit, you've created money. You've made a loan to the bank for $1000. The $1000 still exists, the bank has it, but there is also a record in a database that the bank owes you $1000. Now the bank might also create more money. It might take the $1000 and give it someone as part of a loan to buy a house or car, for example. Now the $1000 still exists, the bank doesn't have it anymore, instead it has a record in a database that someone owes them $1000. That record is a form of money. The Fed also has ways of creating money, and it has ways of influencing how much money banks create. People can also personally create physical money. If your friend needs $1000 and you have $1000, you can loan him $1000 and say "Write IOU $1000 on a piece of paper and give it to me". Money has been created. My money and banking professor told me, "Anyone can create money but it can be hard to get it accepted". There are a limited number of people who will accept your IOU as money. Which all comes back to trust. All money is based on trust. The IOU is, the records in databases are, fiat money is, and money backed by gold is. When money is backed by gold, maybe the government that issues the money will keep its promise to redeem its currency for a specific amount of gold over the short or medium term. Over the long term, it won't keep that promise.