Credit money is money that is backed by a promise to pay made by someone other than the state. Economics offers various definitions for money, though it is now commonly defined as any good or token that functions as a medium of exchange that is socially and legally accepted in payment for goods and services and in settlement of debts. ...

Examples of credit money include bank deposits and credit card loans. Credit cards A credit card is a system of payment named after the small plastic card issued to users of the system. ...

During the Crusades in Europe, precious goods would be entrusted to the Roman Catholic Church's Knights Templar, who effectively created a system of modern credit accounts. Over time this system grew into the credit money that we know today, where banks create money by approving loans - although the risk and reserve policies of each national central bank set a limit on this. The Siege of Antioch, from a medieval miniature painting, during the First Crusade. ... The Roman Catholic Church or Catholic Church (see terminology below) is the Christian Church in full communion with the Bishop of Rome, currently Pope Benedict XVI. It traces its origins to the original Christian community founded by Jesus Christ and led by the Twelve Apostles, in particular Saint Peter. ... The Poor Fellow-Soldiers of Christ and of the Temple of Solomon (Latin: Pauperes commilitones Christi Templique Solomonici), popularly known as the Knights Templar or the Order of the Temple, were among the most famous of the Christian military orders. ...

Sometimes, as in the United States during the Great Depression, trust in bank policies drops very low, and there is the risk of a bank run without government or other intervention. In the United States, the Federal Deposit Insurance Corporation was created in 1933 to prevent bank insolvency from affecting depositors. The Great Depression was a time of economic down turn, which started after the stock market crash on October 29, 1929, known as Black Tuesday. ... Theatrical promotional poster depicting a bank run A bank run is a type of financial crisis. ... The FDIC logo The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass-Steagall Act of 1933. ...

See also

• Commodity money
• Credit
• Credit creation
• Fiat money
• Representative money
• The Theory of Money and Credit by Ludwig von Mises

Commodity money is money whose value comes from a commodity out of which it is made. ... Credit as a financial term, used in such terms as credit card, refers to the granting of a loan and the creation of debt. ... It has been suggested that this article or section be merged into Fractional-reserve banking. ... Fiat money or fiat currency, is money that is current or legal tender as satisfaction for money debts by government fiat, that is by law. ... Representative money refers to money that consists of a token or certificate that can be exchanged for a fixed quantity of a commodity such as gold, silver or potentially water, oil or food. ... Along with Carl Mengers Princiles of Economics, and Bohm-Bawerks Capital and Interest, Ludwig von Mises Theory of Money and Credit, published in 1912, was a major contribution to economic theory. ... Ludwig Heinrich Edler von Mises (September 29, 1881 – October 10, 1973) was a notable economist and a major influence on the modern libertarian movement. ...

External links

• Extract from The Theory of Money and Credit, by Ludwig von Mises
• The (Not So) Poor Knights of the Temple -- this has sites for the Templar Banking stuff: are there any authoritative sources?
• Linguistic and Commodity Exchanges by Elmer G. Wiens. Examines the structural differences between barter and monetary commodity exchanges and oral and written linguistic exchanges.