Money is really just an IOU denominated in the money of account, but there is a hierarchy of monies—some are more widely accepted than others—with the monetary IOUs issued by the treasury and the central bank sitting at the top of the money pyramid. He saw banking as essentially the business of “accepting” IOUs, making payments on behalf of customers and holding their liabilities. Banks make payments in their own IOUs, which are then cleared using the central bank’s reserves. Further, “(b)ecause bankers live in the same expectational climate as businessmen, profit-seeking bankers will find ways of accommodating their customers; this behavior by bankers reinforces disequilibrating pressures. Symmetrically, the processes that decrease the prices of capital assets will also decrease the willingness of bankers to finance business.” (2008b p. 255) In other words, the “money supply” expands and contracts as bankers accommodate the demands of their customers in a pro-cyclical manner.

"Money is a non-existant theoretical force that has never does not and will never exist except in theory on computer screens"