Money is "Created", Not Grown or Built.
Economists use the term "create" when speaking of the process by which
comes into existence. "Creation" means making something which did not
exist before. Lumber workers make boards from trees, workers build houses from
factories manufacture automobiles from metal, glass and other materials. But
in all these
they did not actually "create."
They only changed existing materials into a more usable and, therefore, more valuable
form. This is not so with money. Here, and here alone, man actually "creates"
something out of nothing. A piece of paper of little value is printed so that it is worth
a piece of lumber. With different figures it can buy the automobile or even the house.
It's value has been "created" in the truest sense of the word.
"Creating" money is very profitable!
As is seen by the above, money is very cheap to make, and whoever
does the "creating" of money in a nation can make a tremendous profit. Builders
work hard to make a profit of 5 percent above their cost to build a house.
Auto makers sell their cars for 1 percent to 2 percent above the cost of manufacture and
it is considered good business. But money "manufactures" have no limit on their
profits, since a few cents will print a $1 bill or a $10,000 bill.
That profit is part of our story, but first let consider another
unique characteristic of the thing -- money, the love of which is the "root of all
Adequate money supply needed
An adequate supply of money is indispensable to civilized society.
We could forego many other things, but without money industry would grind to a halt, farms
would become only self-sustaining units, surplus food would disappear, jobs requiring the
work of more than one man or one family would remain undone, shipping and large movement
of goods would cease, hungry people would plunder and kill to remain alive, and all
government except family or tribe would cease to function.
An overstatement, you say? Not at all. Money is the blood of civilized society, the means
of all commercial trade except simple barter. It is the measure and the instrument by
which one product is sold and another purchased. Remove money or even reduce the supply
below that which is necessary to carry on current levels of trade, and the results are
For an example, we need only look at America's depression of the early 1930's.
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