Where Does Money Come From?

As the generally-accepted medium of exchange, money is unquestionably the most widely traded commodity on earth, comprising exactly one-half of every transaction in a modern economy. Yet, despite its widespread use in economic exchange, very few people have a proper understanding of where modern money actually comes from. Indeed, the majority of people, when asked, claim that it is the government that creates the money we regularly hold in our wallets and see in our bank accounts on a...