To answer the question in the headline–money exists as much as anything else that is completely made up out of nothing…
Indeed, check out the above video from Time Magazine’s website. What Time’s Justin Fox tells us at approximately 1:47 is not and never has been a secret: the Federal Reserve creates money out of thin air. He even calls it “magic” and says that the Fed has a “magic checkbook.” After reminding us lowly viewers that we can’t possibly have access to that magic checkbook, the cloying narrator tells us to think of the Fed chair as a “financial Gandalf.” Here’s a transcription of the passage:
Fox: “[The Fed] can create dollars out of thin air.
Narrator: Money out of thin air? Sounds like magic to me.
Fox: OK, that’s magic. They do it in this really simple way, it’s just down at the New York Fed, which is this big building down on Wall Street. There are a bunch of people who call up banks and say, “Hey, I wanna buy some bonds from you.” And when the Fed buys say, $20 million worth of debt securities, they basically have this magic checkbook. The Fed just suddenly says, “OK, we’re sending you $20 million.” Those dollars suddenly show up in the bank’s books.
But those dollars weren’t anywhere before, it wasn’t like the Fed actually had this stash of dollars in its checking account.
Narrator: Annnnd that magic checkbook? Don’t try this at home. Only the Fed gets the magic checkbook. Think of the chair as a financial Gandalf.
Fox: That is the great, mystical power we bestow upon the Federal Reserve System.
I realize this video is going on 5 years old, but I had never seen it until recently. I already knew all of this information and have written about it in these pages before (see for example, “The Solution: Since The Money Isn’t Real, The Debt Isn’t Either“), but something about this really struck me for some reason while watching Fox’s explanation, and that “something” is this: money does not exist. It’s not that I haven’t thought that before or said it a million times and written about it before. I’m not sure why Fox’s explanation made me think it again, but it did.
Because when you really think about it, since the money is created out of thin air, that necessarily means it doesn’t exist. The Fed can no more say that the $20 million in Fox’s above example exists in any sort of objective reality any more than you or I could say that we have, I don’t know, super powers or something, because in objective reality, we do not.
The truth hurts
In other words, money is fictional. Imaginary. Think about that for a minute, particularly if it sounds wrong or nonsensical to you. Let it sink in. Try not to let what you’ve been told your entire life about money get in the way of understanding this very simple concept.
I know you don’t want to believe it. You can’t believe it. After all, if it were true, that would mean…all the hard work…all the long hours…for something imaginary? And that would mean all the hounding of the debt collectors and the shame and the guilt and the worry and the sleeplessness and the suicide or thoughts of it…were for something imaginary?
The truth hurts. But it is still the truth. And once we understand this truth, we face more difficult, painful questions, i.e., why should we let this continue? How best to get out of this false reality?
The Santa Claus delusionSo why would I say money doesn’t exist? Because like Gandalf, it’s fictional. Most people will say, “But I can buy things with the money the Fed creates.” True, but that doesn’t make the money any less fictional, it just means that other people are participating in the massive fiction.
Look, everyone agrees that Santa Claus doesn’t exist, right? Of course they do. However, every Christmas, Santa is everywhere. You can sit on his lap, tug at his beard, tell him what you want for Christmas. He seems quite real!
But unfortunately, Santa is still fictional–he doesn’t exist. And like money, there is mass participation in the fiction of Santa Claus, but that does not and cannot make Santa Claus exist. In the same way, mass participation in the fiction of money does not and cannot make money actually exist.
Above is another, more recent video–from 2013–that again I hadn’t seen until recently (brought to my attention by KathyJo Torrenga). In fact, one of the hosts actually says what I’m saying here: the money for one’s mortgage (or anything else) doesn’t exist (at approximately 0:26)! Indeed, it’s the only rational conclusion one can come to once one really lets this information sink in! Though the video is produced for a New Zealand audience, the material in it is true of every country in the world.
In the short video, we meet an older couple who have realized the scam that bank “lending” is, and the absurdity of the situation is played out over a Monopoly game board and an iPad. We also meet a former banker from London who suggests that the government, not private banks, should create the money supply.
The only problem with the government creating the money? The government creating the money! Indeed, since the dollar has been a pure fiat currency (i.e., backed by nothing and created out of thin air) since 1971, the cat has been let out of the bag that you can actually run a society on…nothingness. It has now been proven that society can run on imaginary “money” that has no inherent value, that is given value only by our faith in it, and is in fact created by we the people. So why should anyone but we the people create the money? It doesn’t really exist anyway, but we know that people do appreciate a token, a feeling that they have not been taken advantage of. That is where the self-issued currency I have written about before comes in:
“I propose that government/central bank-issued money be replaced with self-issued currency. That is, each individual person can issue as much currency as he or she needs to buy whatever he or she wants. And he or she would also have to accept the self-issued currency of others. Sounds crazy, I know, but it’s not. At all. I’ll give you a couple reasons it’s not:
1) Money is already self-issued…
2)Money is already worthless.”
And let’s face it, there’s going to have to be some kind of change in the financial system sooner rather than later. Might as well go into this inevitable change with an idea of something that benefits all people, instead of a small handful.
Let me close with a passage from an earlier post mentioned above–“The Solution”:
“…since the money isn’t real, then the debt isn’t either. Indeed, If we all would accept the truth that the money that was “loaned” to us for houses, cars, educations, etc. was not in fact a loan at all but instead was a purposeful hoax–a trick played on us to get us to spend our lives in a perpetual state of anxiety, panic, and labor that benefits the corporation/state instead of ourselves–we could easily allow all of this “debt” to be forgiven/repudiated immediately and start over from scratch with a new and better system. Indeed, that’s the real story of the Bank of England’s press release about money creation: they are telling us in no uncertain terms that we’ve been had and that we were purposely misled.”