Is Government Printing Money A Good Thing??

I work as an IT professional in the SAP industry and yes, I have a typical full-time corporate job which I hate. SAP stands System, Application and Product. It is the largest enterprise system in the world. I’m working towards breaking off from the corporate world and I believe I will achieve that success soon.

Yesterday, I was having lunch with my group of colleagues – lunch buddies. One of our lunch buddies, for his privacy sake, let’s call him Joseph. Joseph is a senior professional in his 30s working in my department, extremely intelligent and well respected in his field. Joseph also understands the modern world economy and the way society works pretty well.

I was having this conversation with Joseph about how central banks and government scam the society to hike up the inflation with unprecedented rates. Joseph then asked me what did they do to scam us? First example I gave was about central banks. The banks invented loans, for instance, housing loans, car loans, personal loans and many other money lending products. The loans enable individual to buy things that are beyond our affordability very easily, especially properties. When the huge value items are being bought in a huge demand manner, the price surges very fast. The governments endorse this scam by inducing debt creation mindset into our education system. The education system taught us that banks are the safest place to put our money and to borrow money and we should always apply mortgage to buy properties. This schemes by the central banks and government cause the inflation of the property market to rise in extreme rates and in turn, trapping the next generation of people in long term debts, aka mortgages. It is impossible for the regular people to buy house without mortgage. Of course, this trend started more than a hundred years ago and will continue to do so without ending. Joseph nodded and agreed.

Then I gave another example on one of government’s many scams – money printing. I told Joseph that the USD is no longer backed by gold since 1933, and the dollar no longer linked with the gold standard since 1971. The exact years was highlighted by Joseph which I wasn’t aware of. This means that the government is free to printing money whenever they want, without any constraint or regulation. Of course, most of us know about the money printing ‘trend’ in the modern economy. However, I insisted this is a scam to pay off the country’s debt without any value being transacted to the amount owed to another country or the central bank. The government devalues the dollar without any consent from the citizen, and we are forced to pay their ever increasing debts via our tax dollars. On top of the raising property inflation, money printing contributes the largest inflation hike in the history of monetary and economy.

The most interesting part of this story begins.

Joseph had a disagreement expression. He said that money printing is actually good and important to the country. I was literally shocked out of his words. He said that in the ‘modern’ economy, gold backed currency is obsolete because:

1. There cannot be enough gold to go around the world in each country. If the currency’s value is directly based on gold, there won’t be any inflation. A country without inflation is a stagnant economy. The country cannot develop because every investment would have no appreciation and profit.
   Well, OK. That was his point. I politely nodded. Before I can disagree, he went on the second, third, forth ,fifth, sixth and seventh reason:

2. If every currency of the countries around the world is backed by gold, it is not a fair economy. It is because not every country has the natural resources of gold to be mined.

3. If the currency’s value is locked by gold, there will be limited supply of money to be owned by each citizen in the country. This creates inequality to the hardworking people vs the non-productive ones. If the population rise beyond the amount of money available, how can everyone be rewarded of their works – assuming every single citizen has a stable job. Money printing solves the limited supply of money.

4. When the currency is not backed by gold, the government is free and able to manage amount of currency circulating the country and in turn, prevents the shortage of money supply in the population. For example, due to the money printing practice, the US government is able to fund and reward huge beneficial projects such as SpaceX, Tesla, NASA, Google, Facebook, Apple, and the medical industry.
   Wow! I can really see that Joseph is very supportive about the concept of money printing. When I finally got a chance to state my view, I asked him, what if the government prints money without beneficial purposes and just for the sake of clearing debts artificially and spending on useless projects such as war with Afghanistan. (In which they already did all those things.) Who will regulate the government? Joseph answered:

5. First of all, there is no such thing as debt. All debts are money being flowed out in exchange of assets. It’s like a balance sheet in accounting terms. The liabilities are always equivalent to the asset’s value.

6. He then continued, the government cannot print money as when they wish. When there are government bonds to be issued, then will money be printed so that the value of the money will be governed by the bonds value. The number of bonds issued by the government is being determined by the demand of the other countries, aka the market. The currency value will always be determined by the market/economy.

7. As for who regulates the government on monetary value, the same can be said that nobody audits the government when the currency was backed by gold standard. The modern monetary economy is based on ‘trust’ by the people. The market is not stupid.

Up to this stage, what do you think of Joseph’s realization on the ‘modern’ economy and money printing concept? Please let me know by leaving your comments below. I certainly disagree with Joseph so far but I could be wrong. I would really like to know if I’m missing something.

Here are my take on Joseph's points:

1. Gold is a commodity, the price will fluctuate constantly based on basic supply and demand of the market. If a currency is backed or linked with gold standard, the currency will appreciate and depreciate according to the country’s wealth and economy. There will be profit and loss in any investment.

2. Gold is a commodity that trades around the globe, not just mined in the country locally. Back when currencies were backed by gold, the riches countries will work very hard to acquire gold from the poorer countries. The level of wealth in each country is determined by its gold backup. Gold trading is one of the fairest trade in the history of economy. How can a fair economy be obsolete?

3. I personally do not believe the supply of money is limited. Money is always flowing to different parties and every single person will get to earn it and spend it. Even IF the money supply becomes insufficient, I believe the supply can be resolved in one of these two ways:

   a) The government can print additional money to overcome the limited amount but still links the currency with the gold standard. This will devalue the currency but in a very controlled environment due to gold standard, OR

   b) The government can create smaller denominations of the currency so that the total supply can be multiplied and shared by a larger population. This method actually increases the value of the currency rather than devalues it through money printing.
   And NO! We cannot assume that every citizen has a stable job or income! Hardworking people will still be rewarded fairly vs the less productive.

4. The United States is blessed with abundance of genius people that cares about the humanity. SpaceX, Tesla, Google, Facebook, and Apple are NOT funded or rewarded by the government. The capitalists, entrepreneurs and the regular people of the country funded and rewarded those wonderful projects! In fact, the US government tried to take them down by creating nonsensical regulations in the hope of crippling these companies! I personally don’t endorse NASA as well. PLEASE OPEN YOUR EYES and see the reality! If the government is using the printed money for good causes, why is the US debt climbing at such exponential rate? Why does the economy getting worse??

5. There is another component in the balance sheet. It is called EQUITY! And YES! It is possible for the liabilities to be higher than the assets value, and vice versa. The equity is the component that measures that health of the balance sheet and so far, the government’s equity has never been positive.

6. How true that the currency’s value is directly linked with government bonds? Remember that nobody ever regulates or audit the government’s ledgers. Perhaps you may think about democratic constitution that regulates the government. Does democracy really exist? Who creates and approve the constitution, who elects the governmental candidates?? Our only right is to vote for the ELECTED government. With the level of election manipulations and indoctrination, I personally believe this is more like communism than democracy.

7. When the currency was backed and linked with gold standards, the monetary value is audited by the gold’s value automatically by every second of time – and in the world market. This is the main thing (audits) that the government was trying so hard to get rid of. Unfortunately, they succeeded.

Joseph rested his case. Our lunch hour was nearly ended, so I didn’t object much with him, just some of the points above in general.

Up to this point, did I lose my respect on Joseph? Absolutely not! I respect him for his confidence and the ability to present his points clearly and full of enthusiasm.

However, I feel that it is such a waste of talent in our society. I realized he has been indoctrinated so deeply by our society and government’s propaganda through the spread of major media companies (CNN, ABC, CNBC, Bloomberg, WSJ, etc.), radio and television. If I can convince Joseph to wake up to the reality (by taking the red pill), I believe he would become another 'SpaceX' creator. However, his ego is blocking his mind from recognizing the red pill.

We ended our lunch with some petty jokes from the office. We are cool nevertheless.

This lunch conversation was one of my biggest awakening. I always thought that geniuses took the red pill. They can see the reality better than regular people and that’s the reason they are so great in their fields. Now I realized the fact is the other way round. Most geniuses took the blue pill instead and many never woke up in their lives, still stuck with the propaganda world. This is a huge issue in humanity and I wish I have a solution to convince them to choose the red pill.

Again, please let me know what you think about Joseph’s and my take on the money printing scam, and how can we awaken the geniuses around us by giving your comments below.

Thank you for reading and have great day ahead! If you like this article, please UPVOTE.