Summary of “A Letter to My Daughter About the Black Magic of Banking”

As you grow up and experience more of the ups and downs of the economy, you will notice a piece of mindbending hypocrisy: during the good times, bankers, entrepreneurs-rich people in general-tend to be against government.
Entrepreneurs need bankers to lend to them, who need entrepreneurs to pay interest.
Bankers need governments to protect them, who need bankers to fuel the economy.
Who has provided the government with the requisite loans? The bankers, of course! And where have the bankers found the money? I hardly need tell you that they have conjured it from thin air.
Why? Because a market society’s bankers need public debt as surely as fish need water to swim in.
When the government borrows, say, $100 million from a banker for, say, a ten-year period, in return it provides the banker with a piece of paper, an IOU, by which it legally guarantees to repay the money in ten years’ time as well as pay an additional yearly amount to the banker in interest-say, $5 million a year.
Bonds are, in bankers’ parlance, “The most liquid of assets.” As such, they lubricate the banking system to keep its cogs and wheels turning.
In bad times, when bankers pick up the phone to the government and demand that the state’s central bank bail them out, it does so not just by creating new money, as we have already seen, but also by issuing even more bonds and using them to borrow more money from other bankers, often foreign ones, to pass on to the local bankers.

The orginal article.