Where does money come from? Money does not come from the government, i.e the government does not create money, it in fact has to borrow any money it needs - with interest - from the Reserve Bank, a private entity. Here's how it's done:

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When the government is short of money, i.e the money they receive from taxes is not enough to cover expenses, they ask Treasury for money. The govt gives Treasury a "bond", i.e a "promise" that they will return the money with interest at a later date

This "promissory note" from the government is taken by treasury and passed through commercial banks (who collect a fee for this service) to the Reserve Bank. The Reserve Bank writes "cheques" and gives them not to the Treasury but to the banks

The banks then loan the amount on the cheque to Treasury with interest, only then can the money be used by the government. So, where does the Reserve Bank get the money they write the cheque for? Well, nowhere really, the Reserve Bank just says "fiat", Latin for "let it be done"

The Reserve Bank is not the only one that creates money this way, in fact it only creates less than 3% of the money in the economy, the rest of the money (97%) is created by commercial banks in a similar way:

When you go to a bank to borrow money, the bank creates the money. No they don't take money from depositors or "net savers" and give it to you, there isn't enough money in the system for that. What the bank does is simply type digits into a computer and voila!

Banks can lend out up to 10 times the money they have in their reserves, yes they can lend you money they don't actually have, yet still charge you interest on it. They call it Fractional Reserve Banking (i.e the bank needs to have only a "fraction" of the money they lend out)

So, the more money is created by banks through loans, the more money there is in the financial system, meaning the money becomes more and more worthless through the years - inflation. Inflation is a form of tax we owe to commercial banks and has to be paid by future generations

This inflation, which manifests in price increases means things get more and more expensive as years go by, which would be okay if wages did the same, but they don't. This means future generations will be poorer than we are today

But wait, there's more! WATCH:

At this point it should be clear why the Reserve Bank needs to be nationalised, i.e owned by the government and not privately owned: so the government can issue it's own money and not have to pay massive amounts of interest on money it needs to serve it's people

Rest of the video here: