Money is created out of thin air !

In an address to the stockholders in 1924, the Chairman of Midland Bank, Reginald McKenna said “I am afraid that the ordinary citizen will not like to be told that the banks can and do create money.And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people”.

To understand the paradigm of money, we must understand this financial jargon “fiat money”,which means that the modern money is not backed by any physical asset. In the pre-industrial period, the pound sterling literally meant a pound of sterling silver. There was only so much silver out of the ground, it was something tangible and you couldn’t print silver. It was something real and one could not print any more money than there is silver or gold to back it up. The logic of today’s money is very simple, it is just a promissory note, just another bill to pay the debt. In other words,if one draws out note from his or her wallet and chew it, their appetite would not be fulfilled; or if you crumple the paper currency and throw it in the fuel tank, the car is not going to move.

Most of us believe that money is being created by government but the truth is that in the world’s economies, money is created by private corporations called BANKS through loans, mortgages and other debt. Most of us feel that banks lend out money that has been deposited by people. But the fact is that banks create money not from earnings and deposits, instead it is created directly from borrowers promise to repay. Borrower’s signature on the loan paper says that it’s an obligation to pay the bank, the amount of loan plus interest or else lose house, car or whatever assets pledged as collateral. It’s a big commitment from borrower’s side. Today, money is literally created as debt. New money is created whenever somebody takes loan from bank. As a result the total money that can be created has only one real limit the total level of debt. Economist and author Mr. Irving Fisher had once rightly pointed that “the national circulating medium is now at the mercy of loan transactions of banks, which lend not money, but promises to supply money they do not posses”.

Central banks around the world place an additional statutory limit on the creation of money by enforcing a rule known as fractional reserve requirement. It varies from country to country and from time to time. Let’s understand further about fractional reserve system and how banks make money out of thin air. The most common reserve requirement ratio is 9:1 wherein banks need to have at least  Rs.10 in the vault for every  Rs.100 money being created. Banks have 10% more on deposits than it has on loans. It’s misleading information that loans come out of deposits. This illustration will give broader idea. If a customer deposits  Rs.10 into a bank, the bank is free to loan out  Rs.90, on the premise that not everybody is going to come in and withdraw all at once. In reality, banks do not have so much money which they actually lend out. If everybody withdraws at the same time, then banks will collapse, in fact great recessions in US contained run on several banks. Former Chairman of the Federal Reserve, Marriner Stoddard Eccles was quoted saying “If there were no
debts in our money system, there wouldn’t be any money”.
This leaves us plenty of room to research, analyse and understand the nature of what really is money. Former US President, Woodrow Wilson left us with a mysterious quote that has led to several conspiracy theories on how big banks control the global economy, politics and industry. He said “Some of the biggest men in the United States, in the field of commerce and manufacture are afraid of something. They know that there is a power somewhere so organised, so subtle, so watchful, so interlocked, so complete, so pervasive that they had better not speak above their breath when they speak in condemnation of it”.

COURTESY : Sonam Rinchen, 3rd Semester MBA sonam renchan



Life at MARC School of Business (II)

So, here we take you through another two write-ups on the journey of life at a junction called MARC School of Business. And as you will discover, life at MARC is not only about regular classroom teachings. It is more about a holistically approached way of understanding business education through mutual interaction, discussion, experience sharing, subsequent understanding and imbuing oneself with a better sense of knowledge and wisdom.

Article by Ms. Leepha:

MARC B-School…my life’s awakener…

Every day I wanted to fly with my wings of ambitions, every day I wanted to attain and feel the real sense of my dream ..tring tring…

“Leepha you’re selected for MBA course at Management Academy and Research Centre”….and from that day onwards life has never seemed so interesting to me.

I cherish my every single moment of my induction programme.

“Tell me and I forget, teach me and I may remember, involve me and I learn.”, as quoted by Benjamin Franklin, seems to be more profound to me now, and it is indeed.

This is how MARC helps us like an awakener to enlighten our dreams and move towards our goal to become a successful manager, entrepreneur and also a better human being.

It’s the best place to rediscover yourself and refine your talents. Every day you learn and transform into a better individual. It’s simply a combination of learning and fun.

I believe, it’s my privilege to be a student in MARC. I take complete pride in being a part MARC family.

Thank you.

Article by Mr. Nithil B. A. :


First of all I would like to tell you that I have opted the right kind of college that I had wished studying MBA for, i.e. MARC School of Business. I am saying it very confidently because I’m sure that after I walk out of this college with a MBA degree in my hand, I would start thinking differently from others, which would definitely fetch me with an identity in the corporate world or at the society.

To start with, frankly, initially my experience with this college had demotivated me in terms of my personal behaviour which I have taken in a positive note but at the same time it has motivated me and made me realize what am I actually in this world and where do I stand exactly when compared to others. At the beginning of the course I had put a question to myself, whether I can really go with it or not? But the teaching faculty here made it so simple for me to understand things better and made myself find an answer for my question that, why can’t I do? I can do it. After a few days, I felt very happy when I found the answer myself that I can do it and I will do it. Not only the teaching staff, but also the non-teaching staffs have helped us a lot in what we ask for.

We have students here from both northern and southern parts of India. They are all very friendly, caring and helpful in nature. I really enjoy spending time with them. We will discuss the topics related to academics and at the same time we will discuss about the current affairs that takes place in various sectors. By discussing these topics, we exchange ideas, our perceptions, thoughts etc. with one another.

I was a student of the kind where I used to believe and trust only on academics rather than being practical. Now I have come to know that academic part is only a tiny part of MBA. The larger part is concerned with being practical and connecting the subject to the live world. I was not able to sit and concentrate in a class for more than 45min in the beginning, but when I joined this college I was shocked to see that the classes were held for 2 long hours. For this reason I have bunked many of the classes in my 1st semester. Later, the college made me understand why I should sit for such a long time. They gave me a simple example that when I start working at a company I can’t bunk or give weightless reasons that I can’t work. So they are making us know how will the work life will be in future right now, which is very helpful for us to understand.

To conclude I would say that pursuing MBA in here is a real experience of knowing facts and figures better. The best thing here is the fee part, which is affordable. In spite of keeping the fee structure at an affordable level, the college is really providing a standardized education for the students. It also provides guest lectures and PDP(personality development programs) which helps the students know what is actually happening around the world and help suit our personality according to it. Finally I would say to all of you that I have had a wonderful experience in this college and I hope the journey continues…….


MARC Business School is India’s First & only Business School to offer Company Linked MBA program which works on company/industry recommended skills. Recently, MARC has been ranked 2nd In India (New Generation B-Schools Category)To know more about MARC B School, visit our website or follow us on Facebook.

Life at MARC School of Business !

Here, we present a couple of articles written by the students of MARC School of Business, sharing with the reader, their own experience at  MARC School of Business . We are thankful to the students for this literary contribution of their experience from Life at MARC.

Mr Abhijit Mukhopadhyay:

This is a small story of my first step towards success.

It was one of the biggest decisions of my life when I planned to pursue MBA. Finally in the month of February, I cracked my MAT Exam; I started getting a number of calls from various renowned colleges which put me into a state of confusion. Being a fresh graduate I had no idea about good colleges in Bangalore for pursuing MBA. Finally I got a call from MARC school of business, Bangalore; the information about the college intrigued me so much that I instantly set up my mind to be a part of the institution. Finally, in the month of April, I came to Bangalore to become a part of this institution.

The environment I have seen here; the manner in which the staff and the faculties interact  with all the student make me even more proud  to think myself  as a member of such a beautiful family .Not only in the field of academics, but they also taught me about different aspects of management with a very practical approach. The authorities encouraged me to take part in all the cultural and sports activities which helped me discover my own abilities and thereby understanding the practical wisdom of group dynamics and team work.  All these activities helped me polish my communication skills too. The numerous seminars and the lectures given by the guest teachers enriched me with the knowledge of current state of business and economy, the global market, international business etc. This has given me a strong intellectual thrust leading me into a much broader arena of management.

The library is stocked with thousands of books with reference for each subject, the teachers and staffs are available for any need of the students throughout the day. Our college lets me choose between Mysore University and Bharathiar University which are the two leading universities of our country. The excellent campus reflects the atmosphere of gaining wisdom of success. The group discussions and the workshops help us to put forward our ideas in front of everyone thereby giving a momentum to our dreams and aspirations. Talking about the Guest Faculty lectures, which has been a very unique experience at MARC, every guest faculty brings on to the campus various corporate perspective, knowledge and ideas with tremendous individual energy enriching the campus with enough intellectual nutrition. Moreover, regular classroom teachings are based on interactive learning and discussion based knowledge gaining. And this helps me in learning the complex management theories in much easier ways. Shortly, I recall my experience at MARC as a corporate simulation process for student managers. And I have no doubt that this initial experience will help me a lot once I get on to the real corporate world after my MBA.

This is my beloved experience in this exceptional establishment –MARC School of Business, Bangalore.

 Ms Navya Reddy

The Day was not so long back, when I entered MARC School of Business with much of Confusion in Mind but with a heart, full of Dreams.

MARC has “Ctrl Del”(ed) my Confusions and “Ctrl +”(ed) my Dreams. As I’m from a Science background, MARC has helped in bridging my career between Engineering and MBA and guided me to right path of success.

Besides the classroom learning, MARC also imparts to us the lessons that help us in learning from our own Life. In MARC we are already Managers –managing many of the college events which are best examples of learning from life.

Every day in our college is a new lesson for us and that every lesson is always the best memories to be filled in my diary as memorable moments.

It’s not just a college where we are taught, but it’s a platform where we take the opportunity to present the subject which led us to get immersed in it and we get a good grip on the subject.

Mr Ashwin S.V

I am Ashwin. S. V., pursuing my second semester in MARC School of Business .I have successfully completed 6 months of my professional studies in this college.

My first day at MARC was on 18th October, 2012. I started my learning through Business Economics class taken by Mr Sourabh Bajaj, it was about economic planning of India and followed by communication class from Mr Stalin. And as the popular phrase says that first impression is the best impression, it was a wonderful experience on my first day itself. Now while in my second semester, I feel the same because our teaching faculties are providing us with the   best examples and training us for global exposure. MARC has good non-teaching staff as well; they helped me in every issue like education loan, documentation, accommodation etc.

The career counseling which was done by MARC makes a lot of sense to identify my strengths and skills which will help me to achieve my goal it makes the way easy to achieve it. I am sure that, I choose right college to do my M.B.A as well as to enhance my abilities to be a good professional.


MARC Business School is India’s First & only Business School to offer Company Linked MBA program which works on company/industry recommended skills. Recently, MARC has been ranked 2nd In India (New Generation B-Schools Category)To know more about MARC B School, visit our website or follow us on Facebook.

Indian Youth – A Demographic Distraction?

It sounds interesting to many to know Indian Civilization is one of the oldest civilization that has been sustaining till today, but it will be more surprising to them to know that, today this “Ancient” India is a youthful nation, with full of aspiration, ambition and hope to grow better. Guided by many great Indian minds, (a few of them as  mentioned in the article below),  the Indian youths, today, are powerful stakeholder of the nation, society and economy. However, in the complex juncture of various issues arising from the trend of development and modernization, the distraction factor has come up. What is the reason? What is the solution? Does our rich cultural and educational heritage has anything that can guide us ? Read this interesting article which compels you to introspect and seek for a better India for tomorrow. The thoughts have been penned down by Mr. Dipankar Roy and refined by Mr. Ram Powru, from MARC School of Business, Bangalore. Happy Reading !

In a recent media conclave, former President APJ Abdul Kalam said “Democracy is like a Banyan tree” where the roots grow into branches before they return to the roots. In a functioning democracy, common people grow into positions of power so that they can come back and serve the common people. In leading business schools, we are taught that vision and mission are key initial steps to management success. India, by adopting a written constitution for the people, by the people and of the people has got its vision and mission right. Yet in over six decades, our vision remains far from being realised. India is a unique country that cannot be compared with any other, perhaps but with China. Quarter century ago, India and China were being talked of as architects of a new Asian Century. While China is today seen as a manufacturing hub of the world and a military superpower, India leaves an impression of an unrealised potential. What gives hope for India is its three strengths – demography, democracy and knowledge-based economy.

Of the three, the demographic dividend or in other words ‘youth power’ is often seen as the clincher. The census reports show that about 250 million Indians are in the age group of 15 to 24 and another 300 million (equal to the population size of USA) are below 15 years. Survey reports from the Ministry of Human Resources reveal that only 20 million students are enrolled in all University, colleges and vocational education institutes, this implies, less than 10% of the youth are gaining higher education. The burden of achieving the vision for a developed India thus entirely lay on the shoulders of this small section of the populace. It is this section of the nation that has to provide leadership to the other 90% of the youth and to the USA-sized population of the next generation.

Are the youth of today equipped to meet these challenges and can they change the destiny of India? It all depends on the quality of knowledge they are gaining from the higher education system today. Research shows that only 20% graduates are ’employable’ in the organized job market in India. Popular debates on the subject have been quick to point out that the education system, with its outdated curriculum and teaching methodology is not producing the skills and talent necessary to meet the competitive requirements of the modern corporate world. Yet, it is the same system that produces entrepreneurs and scientists out of the Indian youth when they work in Western countries. Such debates often miss out on questioning what the youth are really doing in their daily lives. Being a youth, I can say that majority of my contemporaries are wasting their time in unproductive activities on social media, popular electronic media and in adolescent distractions.

According to Facebook’s latest statistics by country, currently there are over 61 million Facebook users in the India, only behind Brazil and USA. Even though this represents only 5% of the population, it has been steadily growing at the rate of 1 million per month. The worrying factor is that half of the Facebook users in India are in the age group of 18 to 24. While modern technology is to be openly embraced, it is also important to use the technology productively and to be aware of the risks and dangers that it entails. By clicking posts and links in Facebook, the youth is compromising on their privacy and security. Data is being mined on the basis of sexual orientation, religious or political views without the knowledge of the user. Popular television content targeting the youth is designed to keep them engaged in less intellectual programming that are branded as ‘reality shows’ like Roadies, Indian Idol, Big Boss etc. The peer pressure and crass consumption of imported culture leads to depression and loss of direction among the youth. 7,674 cases of suicide were recorded in six metro cities of the country in 2011 according to the National Crime Records Bureau. This, along with the alarming rise in violence and crime against women on a daily basis, has deeply dented the social fabric of the nation.

With demographic dividend turning into demographic distraction, can democracy save the day for the Indian youth? Pessimism and cynicism come to mind when the youth think of democratic politics. It has been in the interest of incumbent politicians to keep 90% of the youth out of the higher education system so that they can continue to perpetuate their politics of power and profit. It is also in the interest of the politicians to keep the small educated section of the youth distracted and disillusioned from the real issues of the nation. News media also has in its interest to sensationalise and trivialise current affairs to increase its viewership ratings and not to ask hard questions.

With demography and democracy failing, is the knowledge economy the only outlet for the youth to take India on the path of progress? The previous generation has shown that despite the politics and society, islands of success can be created by India’s knowledge workers. For thousands of years, India has played host to sources of knowledge in philosophy, medicine, arts, metallurgy, astronomy, mathematics, religion and other faculties through its renowned ancient Universities (Nalanda, Takshashila, Vikramsila, etc). At various stages in history, it has been the youth that has led India to glory whether it is Chandragupta Maurya who united the nation, or Gautama Buddha who enlightened the world with ideas of peace, or Bhagat Singh and his friends who espoused freedom, or Swami Vivekananda who took Indian philosophy to the global platform that later inspired inventions in nuclear physics.

It is long overdue that our higher education system departs from the British colonial format of examination-oriented learning and is transformed into a holistic learning that inculcates ethics, philosophy, critical thinking and revival of ancient knowledge systems. By including current affairs into the curriculum and by inscribing nationalistic values into the subject matter, this small section of the youth that I represent can be dissuaded from the unproductive distractions and can transform India to achieve her national vision and mission.


MARC Business School is India’s First & only Business School to offer Company Linked MBA program which works on company/industry recommended skills. Recently, MARC has been ranked 2nd In India (New Generation B-Schools Category)To know more about MARC B School, visit our website or follow us on Facebook