Back in January 2009, Australian Economist Steve Keen (one of the few economists that predicted the crisis) wrote an essay on his blog describing the theory of endogenous (created from within) money creation. Many readers of this blog may already be aware of this topic from Mish Shedlock's blog, but I think it is necessary that we occasionally look back at such non-orthodox economic views to "recalibrate" our analysis. It is easy to occasionally fall into the trap of gold standard thinking because our main stream media and politicians often treat economics this way. I also post this for those that are not aware of this alternative view of money creation.
I don't agree with everything that Steve Keen has written, but I also believe that his views should be made more public.
Here are a few portions of his essay: