To: Joe Btfsplk who wrote (1791 ) 4/18/2016 7:33:09 PM From: grusum Read Replies (1) | Respond to you already know that i agree with grant on a lot and i believe he's a sound economic trailblazer. however, platitudes are boring, so let's get to the meat of the matter.We conjure dollar bills by the trillions–pull them right out of thin air." i think it's unfortunate that nearly everyone believes this glib statement. they aren't 'pulled right out of thin air'. dollars are created with value. interest has to be paid on them or they don't get created. they are loaned into existence and they have to be paid back with interest. if they weren't created in that way, they'd have no value. that's what separates us from zimbabwe. i don't think that freshly minted 'reserves', that sit in vaults, should be called dollars until they enter the economy in a legit fashion. it's only then that they 'earn their stripes' so to speak. he's correct that dollars would lose their value if people lost confidence in them. the question is, what would cause that? nearly everyone believes it's the creation of more dollars that will cause it. i don't. dollars don't have a static value. i think it will happen through the erosion of our economy by all kinds of economic mischief, including but not limited to, the targeting of interest rates. it seems you can't find a book anywhere in the world, or anywhere throughout history that explains how dollars get their value. no one on earth seems to know. if someone knows, why isn't it in print somewhere? on top of all that, since 1913 (and before) gold priced in US dollars has gone up. but gold priced in US money has gone down. do you think jim grant would understand that statement? do you think he knows there's a difference between money and dollars? i think if one is going to work in the world of economics, it's important to understand those two concepts. and if jim grant understood them, he wouldn't talk about 'dollars created from thin air'.
