I find that money can be so mysterious.  I know, I go to work, I get paid for the work I do, then I go out and pay the rent and food.  We’ve always been told, money is the convenient way of exchanging our labour, time and goods.  Simple.

However, take for instance, the Owner of a factory wants to produce a Product.  He pays his Workers $1000 dollars to make the Product.  However, he wants to charge 1500 dollars so that he can make a profit.  Obviously the Workers cannot buy all the Product, because they only have 1000 dollars.  Thus the Owner must sell some product somewhere else.

He can try and sell the Product overseas, sometimes that works, but maybe he can’t.  He can always sell to the military, they have an unlimited budget.  However, he must sell this product in his own country, how can the workers get more money than they were paid, so they can buy his Product.

Aha, he tells the Workers,  “Go to your banker.”

The worker says, “I need more money,”  and the banker replies “No problem.”

The banker pulls out a card, gives it to the Worker, and says he can spend 500 dollars.  Where did the banker get the 500 dollars that he gives with the card?  From nowhere, from the air.  It’s not as if the Worker is borrowing other people’s money.

So the Worker spends the 500 dollars, and buys the Owner’s Product, and a few other things, then, since he is an honourable man, the Worker slowly pays back the 500 dollars to the bank.  This time this  is real money, that the Worker has sweated hard for, now the bank has 500 dollars of real money, that it didn’t have before.  It started out with 500 dollars of “air’ on a credit card, and Voila! turned it into 500 dollars of real money.   It’s Magic!

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