“ Banks create money out of nothing. Where does the real wealth in the economy lie?
It’s easiest to see when people get it badly wrong Weimar Germany and Zimbabwe had created far too much money compared to the goods and services available within the economy causing hyper-inflation. States can just create money, and the last thing you want is too much of the damn stuff in your economy. They had made so much money it lost nearly all its value, and they needed wheelbarrows of the stuff to buy anything.
States can create money out of nothing as well. You need the right amount of money in the economy for the goods and services available within that economy. The real wealth lies in the good and services available with the economy and is measured by GDP.
Central bankers actually look at the money supply, and expect it to rise in line with the new goods and services in the economy, as it grows. More goods and services in the economy require more money in the economy. This is the problem with gold and Bitcoin, they are not really flexible enough.”