Where does money come from ?

[Someone here]

Is it that Governments can make money from thin air by having their central banks press keys on a computer?

Please help me understand. 

I'm a total noob when it comes to business and finance. 

[JosephKnecht]

3 hours ago, Someone here said:

Is it that Governments can make money from thin air by having their central banks press keys on a computer?

Yes. 

[Israfil]

6 hours ago, Someone here said:

Is it that Governments can make money from thin air by having their central banks press keys on a computer?

Please help me understand. 

I'm a total noob when it comes to business and finance. 

It's not that simple. Research Fractional Reserve Banking.

[LordFall]

The best way I've heard it put is money is the most stable version of human energy. The government prints a representation of that energy. If they print more than the actual human work that they can produce then it becomes worthless. For example, billionaires have access to billions of units of other people's energy that they can deploy in whichever way they want. 

[Tanz]

This will explain it all.  Conceptionally money is a useful idea but the way it is ran makes it a ponzi scheme.  

 

[UnlovingGod]

6 hours ago, Someone here said:

Is it that Governments can make money from thin air by having their central banks press keys on a computer?

Please help me understand. 

I'm a total noob when it comes to business and finance. 

The Government produces money out of thin air. Money is like the blood flowing through the economy. Our economy is based on growth and for that we need an everso bigger flow of money, so that more and more products can be bought. State Depths is not your usual Depth. The State can´t go broke because it has infinite Money, the economy can still collapse, but the state can´t go broke, the circulation of money just may be suboptimal. So why go in depth? To invest in the economy, so that the flow of money increases and the economy growths. A state that does not have any depth, is a disfunctional state. I have the feeling that many people think the crisis of 2007/08, was because of state depth, but it literally didn´t, there is no single connection, those states had to take "loans", that saved a lot of banks and insurance companies from complete bail out. Any "loan" a state takes is not really a loan. The depth is just the MORE MONEY invested in the economy, than the state gets out of the economy, At the end it´s just about growth.

If you want to awnser how money was invented, thats a whole other beast and it's not as simple as "yeah, so we could trade." Thousands of years of history brought us the money we have today and the money we'll have in a thousand years won't be the same as today or thousand years ago.

Edited July 12, 2023 by UnlovingGod

[LSD-Rumi]

@Someone here Money is a representation of products, food, natural sources, structures, and services. Money value is imaginary, we use money to facilitate the trade of mentioned things.

[integral]

The value of money is a representation of that countries economic value how ever that is calculated (inport/outport goods, production of valuable goods, oil reserves, debt, relationships with other contries...). 

The buying power of the average daily wage is a good indication of a countries wealth. There are exceptions if the government is corrupt and controlling wealth with large inequality gaps. 

Edited July 12, 2023 by integral

[Schizophonia]

The central bank of a currency holds enough banknotes both to compensate for the destroyed cash, and also and above all to maintain a slight inflation (because preventing deflation is less risky).
The bank generally creates money ex nihilo when it grants loans to natural or legal persons, it is a simple and sufficient means of monetary creation.

[Leon Vilovic]

For the longest part of human history precious metals where commonly used as money. Then at a certain point state invented a piece of paper that you can exchange for a certain weight of gold (pound was literally a pound of gold). And then at a certain point they just said fuck it and stopped exchanging gold for paper. America for example stopped converting money to gold in 1971. Fiat currency or 'money' as we know it today, is actually a relatively new invention, and yes since the invention of fiat currency the Governments can make money from thin air. They don't use plain language as they are doing this, they usually sugar-coat it in financial terms like Quantitative easing, Inflation targeting, this bill or that bill or whatever.

[Sucuk Ekmek]

1 hour ago, Leon Vilovic said:

 Then at a certain point state invented a piece of paper that you can exchange for a certain weight of gold (pound was literally a pound of gold). 

As far as I know first chinesse commonfolk invented the paper money, they got tired of carrying metals around, and changed metals for paper at the local stores, but eventually folks  issued so much paper whole region hyperinflated and dynasty banned the paper money, and said from now on only we  issue papers.

[Leo Gura]

Fundamentally money comes from labor. But there's a lot of theft going on.

Edited July 13, 2023 by Leo Gura

[Bobby_2021]

3 hours ago, Leo Gura said:

Fundamentally money comes from labor. But there's a lot of theft going on.

Is figuring and deciding where to invest labour in, as important (or even more) as labour itself?

Money itself is not physical, although it's representation is physical. Money is abstract. Just like value is also abstract. But labour is physical. 

Any labour will not result in value. Decisions to invest labour is what is of real value. 

It's fair to equate two abstract quantities(money & creativity/decisive ness/vision).

Not equate one abstract and physical quantity. ( money & labour).

That would complicate the situation a lot more.

[Girzo]

On 11.07.2023 at 10:27 AM, Someone here said:

Is it that Governments can make money from thin air by having their central banks press keys on a computer?

Not only. Main source of new money is when YOU go to a bank and take a loan. That money is created then. 

The system hopes new materials, natural resources will get extracted in the meantime to add to the total economy and the value of money will depreciate only a little bit. If something breaks, for example the flow of gas from Russia, because they have a war you don't support, then there's not enough growth to make up for all the credited money, so money starts to loose value, so you get inflation. If you hit bonanza and suddenly acquire a lot of resources, or when people don't take loans, you get a deflation, money gets stronger.

You live in an extractive economy. It's all incentivized towards raping the Mother Earth. And weaker countries.

Edited July 13, 2023 by Girzo

[UnbornTao]

A printer.

Edited July 13, 2023 by UnbornTao

[Israfil]

12 hours ago, Bobby_2021 said:

Is figuring and deciding where to invest labour in, as important (or even more) as labour itself?

Money itself is not physical, although it's representation is physical. Money is abstract. Just like value is also abstract. But labour is physical. 

Any labour will not result in value. Decisions to invest labour is what is of real value. 

It's fair to equate two abstract quantities(money & creativity/decisive ness/vision).

Not equate one abstract and physical quantity. ( money & labour).

That would complicate the situation a lot more.

When people talk about the labor theory of value, they mean socially relevant labor. 

[thepixelmonk]

Without money our primary commodity becomes people themselves. And believe me, you do not want that. It's how we abstract value away from that.

Edited July 13, 2023 by thepixelmonk

[FourCrossedWands]

Originally, money was always a commodity. Using anything that didn't have real value as money was literally illegal. Silver, golden coins, salt, spices, etc. all were used as a form of money.

To make the exchange easier. Governments started printing paper notes that were backed by gold. They still had real value because you could always exchange them for gold no matter what. In the early 20th century, governments decided we don't need to have money of real value and currencies can be printed on demand.

It has been working for a couple of currencies like US dollar. But most world currencies have lost treir value by thousands of percents in the last couple of decades, some even millions of percents.

Edited July 13, 2023 by FourCrossedWands

[Bobby_2021]

2 hours ago, Israfil said:

When people talk about the labor theory of value, they mean socially relevant labor. 

You take relevancy for granted here. Figuring out what is value is relevancy. 

Let's we both have two labourers.

If I generate more value from one labourer, then it's me who created more value by figuring out where to invest my labour resources.

------

Reminds me of the story of a ship mechanic who was called up to repair a gigantic ship. The mechanic came and asked them for a hammer. He came up to the ship and hit the corner of the ship with it and fixed the issue with it. When he asked for a huge pay all of them were surprised since he didn't do anything apparently. He told them that he is being paid for the knowledge of what tools to use, where and how. Not for the labour he did.

----

7 hours ago, Girzo said:

Not only. Main source of new money is when YOU go to a bank and take a loan. That money is created then. 

The system hopes new materials, natural resources will get extracted in the meantime to add to the total economy and the value of money will depreciate only a little bit. If something breaks, for example the flow of gas from Russia, because they have a war you don't support, then there's not enough growth to make up for all the credited money, so money starts to loose value, so you get inflation. If you hit bonanza and suddenly acquire a lot of resources, or when people don't take loans, you get a deflation, money gets stronger.

You live in an extractive economy. It's all incentivized towards raping the Mother Earth. And weaker countries.

Yes. Money can be thought of as debt. Debt you take from the future.

It's a promise that you will add x amount of value to the economy. And the economy is placing a bet on you to deliver that value. 

Edited July 13, 2023 by Bobby_2021

[Israfil]

1 hour ago, Bobby_2021 said:

You take relevancy for granted here. Figuring out what is value is relevancy. 

 

This is labor too. Administrative labor.

1 hour ago, Bobby_2021 said:

If I generate more value from one labourer, then it's me who created more value by figuring out where to invest my labour resources.

 

No, you just managed work better, and that is valuable too. As I said, management is labor too. The value of the final product has both of your labor and the labor of the worker combined into it.

1 hour ago, Bobby_2021 said:

Reminds me of the story of a ship mechanic who was called up to repair a gigantic ship. The mechanic came and asked them for a hammer. He came up to the ship and hit the corner of the ship with it and fixed the issue with it. When he asked for a huge pay all of them were surprised since he didn't do anything apparently. He told them that he is being paid for the knowledge of what tools to use, where and how. Not for the labour he did.

 

Learning shit is also labor. Is intellectual labor.