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Why Do So Many In The Government And The Federal Officials Believe That Creating Money Out Of Thin Air Creates Wealth?

This is the 17th installment of a series of articles attempting to address the 32 questions posed by Ron Paul in his recent farewell speech given in front of Congress. Check out the previous installment, “Why Did The Big Banks Get Bailed Out In 2008 While The Middle Class Lost Jobs And Homes?”

What is money? This was a question I hadn’t asked myself until years after I had already been actively saving, spending and earning it. It’s sort of like gravity; you know from the time you learn to walk that your feet will always be forced back to the ground, but the concept is something you may not learn until 6th grade or even high school Unlike gravity, however, money is not part of most American grade school curriculums. The question goes unanswered until at least college for some and sometimes never for others.

The first person who attempted to answer this question to me was my 7th grade teacher who very incorrectly told me that money was created by the government based on a weight of gold being held in a secure reserve somewhere. This made sense to me. I could never understand why governments had debts if they themselves created this green paper. It also perplexed me why the green paper in my wallet could buy me lunch, but my loose leaf paper was only valuable for homework assignments. But knowing that the government was also held accountable for it with a hard backing asset like gold made sense as to why they just couldn’t make as much as they wanted. It gave me a renewed faith in the value of money since I now thought it wasn’t just paper.

A more sophisticated attempt at teaching me what money is came about 7 years later in the form of college economics courses. Still, however, after finishing 3 credits shy of an econ minor, I labored under the illusion that money was backed by gold. Now this one might be on me because if I actually understood what Macroeconomics were attempting to teach me I would have figured it out pretty quickly. Macro-the study of the larger economic picture as a whole-taught me 2 main things; that through monetary and fiscal policy, recessions were pretty much a thing of the past.

Like the polio vaccine, economic science too had supposedly conquered a natural scourge that plagued humanity. If things were slowing down, both policy toolboxes had the remedy. Fiscally we were to cut taxes and spend beyond our means while monetarily we were to drop interest rates or increase the amount of money. Once the engine was humming again we were to stop the spending and raise the interest rates. That was seriously all I learned in 2 levels of macroeconomics. Never how, never why, just that this was how we tamed the economic beast.

Today I have a much better understanding of money, and although I must admit there is much more to learn, watching the news or political discussions about money makes me fairly confident that I know a bit more than the average pundit or politician. But as interesting as my personal journey to monetary enlightenment might be, I only mention it because I think it partially answers Ron Paul’s 17th question.

The reason most politicians and fed officials believe that creating money out of thin air creates wealth can be boiled down to a few points. The first and least insidious is that they just don’t know any better.

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Because it does create wealth

for them and their friends. Ask the people that got bailouts, I bet they believe that printing money creates wealth.

Cyril's picture

BUMP

BUMP

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

Laissez-faire Economics

The answer to your post's question is given at this laissez-faire Economics link in my signature.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

scawarren's picture

That's a great clip and I had

That's a great clip and I had to laugh at 6:45 :)

It is easier to fool people than to convince them that they have been fooled. – Mark Twain

Cyril's picture

BUMP. No doubts you did. :)

BUMP.

No doubts you did. :)

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Because they don't realize what they believe

Their lives, livelihood, aspirations, worldview are dominated by their place in the establishment system.

There's a hierarchy of values here.

When THEY ask "How do we create wealth?" the value they support is: "Wealth is good for our status quo."

When the alternative to creating money out of thin air is: something other than the establishment, their values default. Print print print!!!

The simple answer is that

The simple answer is that they forget that creating more of something lowers its value.
Its the thinking that if I were to suddenly make some money, I could go out and buy the same stuff I can if I were to get the money elsewhere. This is short term thinking. Many people in the US only think in the short term, never long term.

To climb the mountain, you must believe you can.

They DON'T

believe it. They know that destroying our economy and looting our wealth with worthless currency will create a crisis they will take advantage of. This destruction is deliberate. A strong America will not easily assimilate into the NWO. We are undergoing Regime Change.
What is the difference between Bernankes endless QE's and throwing counterfeit currency out of helicopters (as was supposedly a plan of the allies to destroy Germany in WW2)?

Economic destruction by design

Exactly. This is just another step in the well-calculated plan to force global govt. on the world. Although I do believe that there are some ignorant people in congress who don't understand basic economics and monetary policy.

+ 1

Good question.

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http://www.dailypaul.com/203008/south-carolina-battle-of-cow...
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They don’t. Government and

They don’t. Government and Federal officials use their positions of power to help perpetuate this myth on an uninformed population. International bankers reward their Government puppets with first use of some of the freshly “printed” money which enables them to become fabulously wealthly at the expense of all the rest of us.

If we could get even 10% of the population in this country (that still knows how to think),to JUST educate themselves about the FED and then accept the REALITY of the scam being perpetrated on each and every one of us...there would be bankers fleeing this country in droves to avoid being hanged.

Really intelligent people that I have been talking to for months and years...just REFUSE to believe that there really is a large group of people living in America that can LITERALLY remote into their bank accounts (like we all do to check our balances) and just type in 50 million or 100 million dollars, in the DEPOSIT side of their account. These professional criminals are probably stunned they have been getting away with plundering the masses for nearly 100 years.

They don't even hide it anymore. They told congress and the American people that they are going to "print" themselves 80 billion dollars a month...indefinitely...(using the US Debt Account to offset the accounting entry each month) and STILL 99% of the people who are being ROBBED directly AND are also having the value of their currency destroyed don't have a clue, or don't care.

I can't imagine what it must be like to be able to create BILLIONS of electronic money using just a few keystrokes and then just jetsetting around the globe, buying yachts, homes, ANYTHING...having done NOTHING for all that "wealth". 16+ trillion dollars have been piled onto the backs of the unborn...impossible to EVER be repaid of course...but what difference does that make to the crooks who continue to use their endless pile of electronic money to buy up land, resources, real estate, and any other "hard asset" they can find? When the dollar dies...they won't feel a thing. It's really insane and I'm not ashamed to admit that I wish I had some of that money. I'm not a thief and I'm very honest, but if (like the FOMC and other FED officials) come right out and basically tell congress and the American peole that hey "We are going to give ourselves billions each month and let future taxpayers be responsible for paying it back"...and no one objects, time after time....well then sh1t...what the hell...at least they ASKED! Makes me insane when I think about this too much.

i

Also made it through college with a minor in finance and did not have a clue what the value of money was based.

Because most

Because most lawmakers are lawyers and have no idea whatsoever how economics actually works.

http://lionsofliberty.com/
*Advancing the Ideas of Liberty Daily*

Exactly

A mix of plain old ignorance and plain old greed.

They don't

The ones running the show (Illuminati) know it will bankrupt us all but their minions who don't even know what their doing (Some political figures across the globe) dont.