How is money created, by whom and when ?

Money exists in two forms :
-   as printed paper
-   as numbers in computers

Money is created by
   central banks (Who decides to create money ? Bureaucrats, financiers, politicians ... ?)
   commercial banks when they lend money to their customers (In this case, credit is at the origin of money).

Commercial banks are working according to a fractional reserve banking system (fractional reserve banking)

For a government, to have or not to have money for any budget is a political choice. For this reason, one has to understand what it means when it is easy to find 1 trillion for wars or the military and nearly "impossible" to find money for healthcare or education..

Financial products

Development of financial products has really started after the end of the link between the US dollar and gold in 1972. The US could then print dollars at will and have them backed by "petrodollars" !

Derivatives

ABS - Asset Backed Security

CDO - Collateralized Debt Obligations

CDS - Credit Default Swap

IRS - Interest Rate Swaps

CLO - Collateralized Loan Obligation

CMO - Collateralized Mortgage Obligation

Other financial products

Bonds

Shares

Futures 

Options (Call, Put)

Exchange-Traded Note (ETN)

SKEW

Derivatives (finance)

Mathematical finance

Technical analysis

ETF

VIX (XIV => inverse VIX)

Impact of the financial sector on the price of products

Average composition of a product final price in the West
Direct or indirect interests paid to banks	44
Commercial costs and marketing	26
Other costs (like education, health, administrative costs...)	20
Total production costs of which salaries : 6	10
Prix final du produit	100
Reducing salaries will only, at most (no salary), reduce final costs by 6 !!)

Average composition of a product final price in the country where the emphasis is on the productive sector and where financial products are of little use
Direct or indirect interests paid to banks	4
Commercial costs and marketing	4
Other costs (like education, health, administrative costs...)	8
Total production costs of which salaries : 6	10
Product final price	26
Using the same means of production, final cost is down to 26 instead of 100 !!
If this country use more advanced means of production, a better method of analysis what are the consequences ? Final cost will be reduced to about 8 !!

Competitiveness of countries where the economy is mostly based on financial products ??

In the case of countries where the economy is mostly based on financial products, financial gains are going directly to less than 1% of the population and indirectly to less than 10% of the richest. On the other hand, salaries are the earning base for the other 90%. Reducing salaries reduced also the buying power of 90% of the population and thus sales to them. The most important consequence is the fall of production, the collapse of the real economy. This policy accelerate the deindustrialization of the country that apply it. This intensify the crisis instead of solving it !!!