Money FAQ
Debunking Money Myths
Fact or Fiction?
- Money is a medium of exchange.
- Money is a measure of value.
- Money is a store of value.
- Printing money is a crime. If caught, you will go to jail.
- Money is issued by the Federal Reserve Bank.
- Money is printed by the government.
- The Federal Reserve Bank is a branch of the government.
- The government controls the Federal Reserve Bank.
- Money has no value if it is not backed by something rare, like a rare commodity, gold, silver etc.
- Bank vaults contain money and valuables.
- Banks create money out of thin air.
- Money is always scarce. That is the nature of money.
- The business cycle is a natural phenomenon of markets interacting with each other.
- There would be no economic problems if we had a centralized, one-world currency.
- The earth cannot support the current over-population, that is why money is scarce. There are not enough resources for everyone.
- Some people deserve to have money, others do not deserve it.
- If there is no money, people have to starve.
Answers:
1. Money is a medium of exchange.
True. Money is simply a means for people to organize their transactions with each other. All transactions start as barter. But, unless there is a “coincidence of needs” between two parties, barter is clumsy. Using a symbolic element helps people to postpone fulfillment of needs until a suitable offer is found.
2. Money is a measure of value.
False. Money (as paper notes or data in computers) does not in and of itself represent any intrinsic value. Money cannot be eaten. It does not not keep rain off one’s head. You cannot wear it. If you consider what would be needed for a person to live, you will see that simply some paper money or more commonly today, some electronic blips in a computer do not provide anything we need until we trade them for something. Since the world economy is based on debt and with all governments of major countries borrowing value against future production, thus forcing the value of money to steadily decline, it is debatable whether one can measure anything against it. Money has worth only as a medium of exchange.
3. Money is a store of value.
False. This is definitely no longer true. Even though currencies are traded and speculated on all over the world, money no longer functions properly as a store of value, because in this day and age, all money is fiat money, it has ceased to be backed by any commodity. In the event of a calamity or war, money becomes useless.
4. Printing money is a crime. If caught, you will go to jail.
False. Anyone can print their own original self-designed money. Companies and individuals do this all the time. Recently a man went to jail for legally printing and minting money (see: Bernard Von Nothausen and the Liberty Dollar), but he probably was not breaking any law. The money cartel will very likely not rest if their complementary currency begins to represent a viable alternative to the central bank’s monopolized version of money. Nevertheless, there is no law against printing your own money as long as you are not counterfeiting.
5. Money is issued by the Federal Reserve Bank.
True. The Federal Reserve has the right to issue currency, yes. It has the right to create it.
6. Money is printed by the government.
True. Yes, our government prints and mints money. But that is the extent of the government’s involvement in the process and control of money.
7. The Federal Reserve Bank is a branch of the government.
False. The Federal Reserve Bank is not related to the government. The Federal Reserve is neither Federal nor a Reserve, thus the name leads to confusion. It is a private, for-profit corporation with dubious objectives. One could say, it is a government unto itself.
8. The government controls the Federal Reserve Bank.
False. One could argue that the reverse is true. The “Fed” is not audited, nor regulated by any agency of government. All efforts throughout the history of the Fed to regulate it have failed until now. It is accountable only unto itself. The Federal Reserve is in fact a cartel, a monopolistic organization, controlled by powerful men (mostly white) with the objective of keeping power in the hands of the few.
9. Money is not useful if it is not backed by something rare, like a rare commodity, gold, silver etc.
False. If this were true, you could not spend federal dollars, as they are not backed by anything at all. Money is simply an agreement people make with each other. Money and economics has been successfully mystified by economics theorists and lawmakers etc. Essentially, money is very simple, but it has been complicated by the weight of regulation over the years which bestow benefits upon the powerful and gut the efforts of less powerful entities to retain or control it. Interest laws figure largely here.
10. Banks consist of vaults containing money and valuables.
False. Banks often provide vaults as a service to customers, but do not often keep a lot of physical dollar notes on hand.
11. Banks create money out of thin air.
True. Bankers lend money into existence. When a bank gives a loan, it simply makes an entry into a computer, inflating the money supply according to the amount of the loan. It is not much more complicated than this.
12. Money has to be kept scarce. That is the nature of money.
Very debatable. Money is scarce simply because there are people who control the flow of currency and this group builds a monopoly. They meet and decide in secret how to fix interest rates and how and when to loan money into circulation. Many times in the past this group has decided, for reasons of its own, to constrict the money supply, effectively crippling an economy.
13. The business cycle is a natural phenomenon of markets interacting with each other.
False. As stated above power mongers meet in secret to determine the playing rules. The field is uneven. They change the rules to suit their whims. Markets are controlled by this, not vice versa. Otherwise, bankers would have no reason to meet in secret.
14. There would be no economic problems if we had a centralized, one-world currency.
Probably not. The reason the world economy is in trouble has to do with the increasing concentration of power at the top. Markets are not able to freely regulate themselves. Large money interests constantly intervene and skew the advantage towards those who do not have the best interests of human-kind at heart, but function purely from a short-term profit motive.
15. The earth cannot support the current over-population, that is why money is scarce. There are not enough resources for everyone.
Patently untrue. Money is scarce because it has been artificially made so by the money cartel. Many organizations are rewarded for non-production in many sectors. Think agribiz subsidies etc.
16. Some people deserve to have money, others do not deserve it.
Decide for yourself. Who determines who is fit to receive money and who is not? Don’t people who are working hard deserve at least enough money to afford to live a relatively health-filled life?
17. If there is no money, people have to starve.
Untrue. The amount of money in circulation has nothing to say about the amount of food that can be produced. But if monied interests drive people from the land, this is very often the result.