This outline briefly describes the objectives of this presentation:

Establish a working definition for money.

We cannot have a meaningful discussion of money and its role without having a precise definition of money.

Discover what actions you take to expand the quantity of money.

Consumers play a lead role in all aspects of an economy. We'll discuss what actions of yours, as a consumer, affect the quantity of money in our current banking system.

Show how The Fed influences bank reserves and the relationship between bank reserves and the quantity of money.

Bank reserves affect the quantity of money only indirectly; not directly. We'll work through some examples to help you understand how the Fed influences reserves and what actions of the Fed actually introduce new money into the banking system.

Describe The Fed's real role in determining market interest rates

We'll find out if the Fed has the level of influence on market interest rates that it wants you to believe. In a phrase, they do not.

Introduce some basic economic concepts

To understand the details of the topics outlined above we need to understand a few other basic concepts, which I will introduce throughout this presentation:

Value & Price

Consumers determine value according to their individual preferences.

We only know a price after a transaction has occurred.

Interest

Interest represents an expression of time preference by an individual for any economic good including, but not limited to, money.

Balance

For every economic good we use, we must have a source. Understanding this concept helps us understand financial accounting. (It should lead politicians to question their spendthrift ways.)

Effects of Inflation/Deflation

Artificial changes in the quantity of money (Inflation/Deflation) distort the decision mechanisms of the market