I recently came across an investment service called Epsilon Theory. They have an enormous range of articles and reports that are among the best-researched and easily understandable of any that I've read anywhere else. I've taken up their (limited) free subscription offer, and I recommend it to you as well.
I found their article, published in early October, dealing with the British banking blow-up and titled "A Brief History of the Past 10,000 Years of Monetary Policy and Why Last Week Was a Big Deal", to be an excellent summary of money and monetary policy. I sent it to several people who hadn't had much exposure to issues such as monetary policy, and they uniformly reported back that they'd found it easy to understand and it greatly simplified the subject for them.
Here's the beginning of the article. I've added the links embedded below.
In the beginning, someone with a business wanted money from someone with money.
There are two and only two voluntary (i.e., without the threat of physical violence) ways of doing this. In exchange for the money, the person with a business can promise the person with money a share of the future economic activity of the business, or they can promise to repay the money in the future along with more money. In general, we call the former promise “equity” and the latter promise “debt”, and people with money have been collecting these promises from people with businesses since money was invented. These collections of promises are called “investment portfolios”.
About a nanosecond after money and equity and debt were invented, the business of facilitating these transactions was invented. Today we call this business “Wall Street”, but of course it goes back thousands of years, way before there were things called streets. The business of Wall Street consists of two and only two things: thinking up news ways to create a transferable share of some future economic activity, and thinking up new ways to borrow money today for a promise to repay that money and more in the future. We call the former activity “securitization”. For example, equity promises are securitized into “stocks” and debt promises are securitized into “bonds”, which makes the sale and resale of these promises sooooo much easier. We call the latter activity “leverage”, which is just a ten-dollar word for borrowed money.
Every bit of financial innovation over the past ten thousand years or so – all of it! – has been in service to one or both of those two activities: securitization and leverage.
There's much more at the link.
I highly recommend this article if you find yourself wondering what's going on in our financial markets, why the economy is tanking, or why the Federal Reserve is doing what it's doing. By the time you've read the whole thing, you'll understand far more than most of our politicians!
Frankly, one simply can't keep one's head above water in today's economy unless one understands the effect that money and monetary policy have had, are having, and will continue to have on our nation. This article will give you enough of a foundation, expressed in very simple terms, to do that.