The whole modern money mechanics relies on the fractional-reserve banking system. That system eventually evolves (as it already did) into a central banking system. Today, the dollar is the reserve currency of the world. So today, the most central bank in the world is the Federal Reserve Bank of the United States of America.
Understanding the creation of money under a fractional-reserve banking system is to understand the issuance of interest-paying, first private then public money-as-debt. Which includes to understand why the resulting debt-as-money supply must grow exponentially—green line below (f(x) = 2x):
This is crucial because:
Exponential debt growth requires economies also to grow exponentially. This puts ever more pressure on Earth’s resources, which are already showing signs of depletion.
The money supply growing exponentially results in inflation and hyperinflation. This undermines the capacity of debtors to pay their debt principal and even its interest.
Debt defaults in turn cause a contraction of the debt-as-money supply. This both contracts credit and causes deflation.
Modern Money Mechanics: Resulting Debt
The levels of private and public debt resulting from the mechanics of modern money are: