Ayn Rand doesn't know where money comes from?
It comes from debt? Where does the money given to the debtor come from?
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Up until the medieval period, money was a means of exchange. Historically gold and silver was traded for products. Money as debt viz. Fractional Reserve Banking was an attempt to replace gold and silver with promissory notes. The following from Wiki…
Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers' realization that generally not all depositors demand payment at the same time.[4]
https://en.wikipedia.org/wiki/Fractional...
That it was a scam was recognized by TJ in 1813…
"If the debt which the banking companies owe be a blessing to anybody, it is to themselves alone, who are realizing a solid interest of eight or ten per cent on it. As to the public, these companies have banished all our gold and silver medium, which, before their institution, we had without interest, which never could have perished in our hands, and would have been our salvation now in the hour of war; instead of which they have given us two hundred million of froth and bubble, on which we are to pay them heavy interest, until it shall vanish into air... We are warranted, then, in affirming that this parody on the principle of 'a public debt being a public blessing,' and its mutation into the blessing of private instead of public debts, is as ridiculous as the original principle itself. In both cases, the truth is, that capital may be produced by industry, and accumulated by economy; but jugglers only will propose to create it by legerdemain tricks with paper."
- Thomas Jefferson to John W. Eppes, 1813. ME 13:423
The following was printed and distributed by the Chicago Federal Bank. It is frightening, the lower the reserve requirements the more money(debt) they can counterfeit.
http://www.truthsetsusfree.com/ModernMon...
"Dirk" confuses currency with money. Yes, currency is "created". Money, on the other hand, is merely the medium of exchange of value for value. We can barter for exact exchange of value provided by one person to another and the reciprocal exchange of value in return. Since this is a very inefficient mechanism (difficult to find the exact provider of what you are looking for at the time/place that you need who in turn needs the form of value that you can provide in return), we implement a surrogate for that exchange. It may take the form of anything that both parties recognize as a store of value - gold, silver, gems, or pieces of paper. Sound systems of exchange are based on a relatively scarce item (gold) that is difficult to increase in a short period of time. This ensures that the store of value remains relatively stable.
We have moved from a sound system to an unsound one - based on fiat currency. There is nothing to prevent an unlimited amount of currency from being created - and that is what is actually occurring today. This will inevitably lead to inflation. When the totality of the currency created exceeds the amount of economic activity generated, there exists an imbalance in the amount of currency relative to the wealth - and when you have more currency than you have value, the currency chases the value and prices increase.
TRADE = exchanging one product/service for another. Hard to produce exact equitable trades because you don't always have what the other guy wants, and even if you did it's hard to divide goods and services up into precise units for trade/exchange purposes.
MONEY = the univerally-accepted product. Something everyone accepts/values. Superior for trade because a good money is very divisible. See also: gold, silver.
CURRENCY = a marker, a claim, a check, a note, a receipt, call it what you will. It is a surrogate for a precise amount of money. It is used because large amounts of money are hard to move around. See also: gold and silver certificates. Example: http://en.wikipedia.org/wiki/Silver_cert...
FIAT CURRENCY = Currency that is not a surrogate for a precise amount of money. It is simply a piece of paper people accept as having a value because "the man" says so. Example: http://en.wikipedia.org/wiki/Federal_Res...
Ayn Rand was exactly correct in the Francisco speech. The need for money only comes about because people need to trade goods and services with each other. Money is not born as debt. Money is born of necessity as people take raw materials and create products that others want. Others need to trade SOMETHING for those products. What shall it be? Society discovers "money" - the thing everyone accepts as valuable for all the right reasons.
"Destroyers seize gold and leave to its owner a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it." - Ayn Rand
http://31.media.tumblr.com/tumblr_mcmrvr...