How does the square mile generate money?

[wesimmo]

Its less about how much "money" is out there, it's more about the velocity.

If cash is moving around quickly then the economy can still be working without creating "money".

People create "value" through working or owning assets and that pushes money around.

 

[randomshenans]

Go and eat some frogs.

But how are the frogs created? Or are they just redistributed?

 

[randomshenans]

So it all boils down to rocks and timber. I knew money was both created and destroyed. The economy has to be continually growing for this system to work. However there must be a critical point in the future when things are saturated(goods and services) too many people, houses and not enough resources or jobs.

You should read freakonomics, it gives you a lot of info that you might find useful.

Money is created daily, and it is done so to encourage spending. This is also a reason why bank lending becomes "easier" or less costly to the public and also why interest rates are so low. It encourages people to use the money they have. This whole BS finance industry is propped up and balanced by a **** ton of people trying to make everyone spend, growing a false economy and the circle continues.

 

[NVP]

But how are the frogs created? Or are they just redistributed?

 

[manic111]

The point is, are they creating money or redistributing money. AFAIK, only banks through fractional reserve banking or the BOE
through printing money (QE etc) can actually create money.

If they're not creating money yet both clients and the city are getting richer each year then where is the extra money coming from.

They're "creating" money in the same way as any other services industry. They provide their advice and skills in exchange for fees, just as when you go to the dentist and pay him.

 

[jsmoke]

You should read freakonomics, it gives you a lot of info that you might find useful.

Money is created daily, and it is done so to encourage spending. This is also a reason why bank lending becomes "easier" or less costly to the public and also why interest rates are so low. It encourages people to use the money they have. This whole BS finance industry is propped up and balanced by a **** ton of people trying to make everyone spend, growing a false economy and the circle continues.

I watched the doc but again years ago. I get the picture again so it's arguably OK to be rich as your money is being used by the banks anyway.

 

[toshj]

To give you an idea of banking fees - Sainsbury's attempted merger with Asda this year, which was blocked by the regulator for competition purposes, cost them £46m in advisory fees to investment banks!

 

[Freddie1980]

It apparently generates a large amount of the overall tax revenue.

There's trading, auditing, banks, private equity and hedge funds I get that but how and where from do they generate their money?

Take the company I work for, other companies will approach us looking to arrange insurance coverage on an asset. We will broker a deal between the client and the under writers and charge a fee for the work, we also do consultancy work for client who need help setting pension coverage or health schemes all of which costs money. Banks