The Socialist Anti-Semitic Myth of the Creation of Money out of Thin Air

Iakovos Alhadeff

 One of the most widely spread socialist anti-Semitic rhetorics is the “creation of money out of thin air” story.  It is extensively used by socialists of both kinds i.e. socialists of communist and socialists of Nazi origin.  Those of communist origin talk about the “greedy” banker, and those of “Nazi” origin talk about the “greedy Jewish” banker. All the difference  is this one word, which can be added or subtracted according to personal tastes.

This anti-Semitic propaganda says that “greedy Jewish” or “greedy” bankers create electronic money out of nothing. They press their keyboard and they create money, and they use that money to indebt people and control the world. This is one of the most important and widely spread socialist anti-Semitic rhetorics, and it is very important that it is destroyed.

Before destorying it, I have to explain what socialists mean when they say create money “out of thin air”. They mean that a banker, agrees with a customer to give him a loan, and when the contract is agreed, the banker opens a deposit account in the name of the borrower. This new account is money, since the borrower can write a cheque on it. Therefore the heart of this propaganda theory is that a Jewish banker, sitting at his chair, issues a loan, hits his keyboard and opens a deposit account too,  and charges interest on the borrower.

Therefore socialists claim, that Jewish bankers create money out of nothing and indebted the people in order to control the world, since they create money and charge interest on it. I will come back with a much longer and detailed document combating socialist anti-Semitic banking rhetoric, but I want to offer a first shorter and more general explanation of why this is pure anti-Semitism. Do you know how easy it is for a government to stop this “out of thin air” money creation? All it would have to do, would be to ask private banks to back deposits by 100% of paper money i.e. euro notes. Imagine an economy, where there is 1.000 euros circulating in the economy.

If the government asks private banks to back deposits with 100% of paper money, the following will happen. Let’s assume that I am the greedy Jewish banker, and one of you holds the 1.000 euros circulating in the economy. And you come and deposit it to my bank. If the government requires that I back my deposits with 100% of paper money, I cannot create money. If I want to create money, I will have to do the following. Issue a loan to a customer, and open a deposit account to this borrower. Let’s say I issue a loan of 1.000 euros, and I open a deposit of 1.000 euros to the borrower. Now deposits in my bank are 2.000 euros, and covered only by 1.000 paper euros, which is illegal, and my bank goes down.

If on the other hand the government asks me to back my deposits with 50% of paper money, I can do the following. Issue a loan of 1.000 euros, open a deposit to the borrower of 1.000 euros, and my total deposits will be 2.000 euros, while my reserves in paper euros will be 1.000 euros, which means 1.000/2.000=50% exactly as required by the law. Therefore a banker’s ability to create what socialists call “money out of thin air”, derives from the much lower than the 100% reserve requirement imposed by governments. To stop this “out of thin air” thing, all a government would have to do, would be to require private banks to back deposits by 100% paper euro notes. But do you ever hear socialists either of Communist or of Nazi origin saying so? No, you never do. You always hear them crying that “greedy Jewish” bankers create money out of thin air.

But they are so silly, that they forget that for a person to borrow, and indebted himself, he must know what he can buy with the money he borrows. I borrow 500 euros, because I want to buy a tablet. And as soon as I get the money I buy it. And I pay an interest of 3-5% which is very low. It is not real. It is the European Central Bank that keeps interest rates artificially low. They should be at the level of 15-20%.  But that’s not the issue. Therefore if the Jewish banker creates money out of nothing, it is not the borrower who is his victim. His victim is the producer, whose products the borrowers buys with money produced from nothing, and on which they pay very low interest rates.

Therefore if the Communists and Nazis were honest, they would attack the Jewish banker because he harms the producer, whose products are bought with money produced out of thin air. But do you ever hear them saying so?  No you don’t. They always present the borrower as the victim. The reason is that all socialists care about is controlling the banking system. And producers are the depositors/savers. And deposits are a liability for the banks. Therefore socialists always see positively a haircut in deposits because it makes banks healthier. But loans i.e. mortgages etc, are the banks’ assets. And if you allow the houses of the borrowers who do not pay their mortgages to be sold, their prices will go down. And if their prices go down, the banks’ assets will worth less and will be easier for foreign investors to buy them.

The truth is that producers’ goods were bought with money produced out of thin air by governments and not by Jews. But someone must be blamed. Moreover socialists like fractional reserve banking, because they want private banks to expand money supply swiftly, because they use the money supply to finance government spending, and as a means of stimulating the economy, as I was explaining in my essay “The Socialist Myth of the Greedy Banker”, which can be downloaded for free in pdf, mobi, or epub format from Smashwords, at the following address

https://www.smashwords.com/books/view/418385

Reading my essay “The Socialist Myth of Economic Bubbles” will also help one debunk socialist anti-Semitic propaganda. This essay can be downloaded for free from Smashwords at the following address

https://www.smashwords.com/books/view/450662

Or you can download for free my essays from Apple’s ibook store at the following address

https://itunes.apple.com/us/artist/iakovos-alhadeff/id840901147?mt=11

Or you can download them for free for the nook devices at Barnes and Nobles

http://www.barnesandnoble.com/s/iakovos-alhadeff?store=allproducts&keyword=iakovos+alhadeff

Or you can buy their kindle editions at Amazon

http://www.amazon.com/s/ref=nb_sb_ss_i_0_7?url=search-alias%3Daps&field-keywords=iakovos%20alhadeff&sprefix=iakovos%2Caps%2C605&rh=i%3Aaps%2Ck%3Aiakovos%20alhadeff

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28 Responses to The Socialist Anti-Semitic Myth of the Creation of Money out of Thin Air

  1. Pingback: Quora

  2. Mises says:

    Theorem : the concept of train is an anti-semitic concept as well, nazis having extensively used trains for deportation.

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    • But the communist and nazi arguments are exactly the same. Please listen to them. I said that there is the differnce in the communist word ” greedy” and the nazi word “jewish”.
      But the difference is not as significant as it seems, because most people think that Jews control the world banking system. So they simply add the two words and say the ” greedy Jewish” banker. Maybe they don’ t do it verbally, but they definetelly do it in their minds

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      • jewish communism = corporate control of the economy + promotion of class contention
        nationalism = national control of the economy by the people + promotion of class harmony
        Nazi = a word from a jewish movie which was never used by an Europeans…
        who do you think believes your pro jewish BS line here? you need the Blod Orn in your rib cage yes?

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  3. José says:

    I’m astonished. I don’t think I’ve ever read an “article” as naive and/or misleading as this.
    Do you know how HARD it is for a government to stop the “out of thin air money creation”, when that party achieved the power supported by banks and media companies (how many of theese are controlled by Jewish people, in a country as, let’s say, the USA)?
    Then, I don’t understand how is the producer the looser, when he’s geting paid for his work, such as the borrower, who has to pay what he asked plus whatever percent. The banker get’s the money he borrowed (and that he created out of thin air) plus a percentage. What’s his work in the process? The producer made the (let’s say) tablet, the borrower work to pay the banker, what did the banker do? Press a button?
    And when you say that nazi and communist arguments are the same…I wonder if I’ve spent 5 minutes on my life with someone that “brilliant”.
    Good work trying to sell that “theory” of yours, you’re going to need it.

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    • You find it naive because you have no idea about economics and banking. The producer took the money created out of thin air by the government, put them in the bank, in deposits, and these deposits were gone. Now either he will lose his deposits, or as a taxpayer, he will pay to save his deposits. You need to think about it a bit. Read my essay ” the socialist myth of economic bubbles”. I believe it will help you understand.

      Now, if propagandists have promised to clear your debts and you love them, and you are willing to believe any conspiracy theories they throw into your face, it is your right to do so. I did my best to help you.

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      • José says:

        “The socialist myth of economic bubbles”… considering the times we’re living, the title sounds…daring (at least).
        You’ve said that I know nothing too soon…used all the arguments already? I have no debts (it’s called responsability), and I don’t rely on propagandists (nor on economy experts) to tell me what to think. The problem, and I don’t recall you, economist expert, saying it, is that there is no gold standard to back currency, which gives the government (and poor bankers who don’t have a choice) the power to do as they wish with currency.
        Banks are ruling your country, my country and all countries. I don’t blame Jewish people, I blame Jewish bankers, Christian bankers and even animist bankers (if there’s any). So stop seeing it as a matter of religion (or even race); it’s a matter of classes, and it’s a matter of war.

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      • I did not say I am an expert, because I am not. But I know the basics. There was the gold standard, but no government likes a constraint on how much money to create. And they destroyed it. I have written an essay about it, “the socialist myth of the greedy banker”.

        I do not mean to be rude friend. But there are some things that are very basic and undisputable. Have you read any of Murray Rothbard’s books?
        Rothbard makes life easier

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      • José says:

        Well, when you said that I had no idea, I tough you knew what you were talking about (actually no, but it’s for the sake of irony).
        I see you like to attack communists and socialists. Perhaps the Jewish people didn’t had to go through Hollocaust if the world powers hadn’t been so afraid of the German Communist Party. Think about it.
        And no, I haven’t reaad Rothbard, and I don’t think I’ll ever read anything coming from the Austrian school. I like to think about the future as a better one, not as a land of slaves and slaverers.

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      • Socialism is not a synonym for anti-Semitism, but they go hand in hand. Listen to Milton Friedman

        Do you know which countries have the strongest anti-semitic opinions in Europe? France and Greece. They are the most socialist countries
        of the European Union. It is no coincidence.

        http://iakovosalhadeff.hubpages.com/hub/Greece-Israel-the-Arab-countries

        and

        http://global100.adl.org/#map/weurope

        And I was not talking about communists. I was talking about socialists i.e. both communists and nazis

        http://iakovosalhadeff.hubpages.com/hub/Communism-Nazism-Two-of-a-kind

        Try to give a chance to Rothbard. It is free

        https://mises.org/books/whathasgovernmentdone.pdf

        I will ask you what Milton Friedman says in the video. In which countries did the Jews survived and prosper? They did not survived and prospered in socialist Russia or national socialist Germnany. They managed to survive and prosper in the free countries (USA and England).
        Which countries helped Israel? It was again the free and not the socialist countries.

        And yet, as Milton Friedman says, most Jews are socialists……Jewish peope should have known better and not expect compassion from socialists who like the idea of equal men, and are not tolerant towards minorities. Jewish people should always stand by the side of free people and not by the side of socialists.

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      • José says:

        Since when is Greece a socialist country? Jews prospered everywhere because they scattered throughout the world. “Over two million Soviet Jews are believed to have died during the Holocaust, second only to the number of Polish Jews to have fallen victims to Hitler”. As far I know, neither communists or socialists have killed 6 million of Jews. That doesn’t seem to matter to you.
        Jews were a powerful comunity in England before the colonization of the USA, and they moved that influence to USA. So, it’s not a matter of freedom. In some countries they have power, in others they do not. So much power, that they even created a state because they wanted to. And then they treated Palestinians like Nazis treated them. As far as I know, Palestinians didn’t caused the Holocaust, yet they were the ones paying the bills. Sounds rather senseless.
        Friedman’s ideas are the basis of the crisis we’re living know), it’s a theory based on many false evidences (proven hundreds of times by economist experts, unlike you and me). A free market doesn’t work (well, it does for banks at least). The deregulation process we’ve live in the past 40 years have led us to where we are today, a global crisis which has the USA in the hands of Chinese (which, by the way, are not communists).

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      • To much analysis for nothing….Where are the wealthy Jews of Russia my friend? Why is it that the Jews are strong only in the U.S.A. and England? Because they are free countries. Remember that the original bolsevick sosialism considers religion “the drug of the people” and forbids it.

        Read this to see how much the soviet union loved the jews. Communists are no different than nazis my friend. All pigs have the same face

        http://en.wikipedia.org/wiki/Antisemitism_in_the_Soviet_Union

        Look what happens today. Both communists and nazis are spreading propaganda documentaries like “money ase debt” etc

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      • José says:

        You don’t know how’s Roman Abramovich, do you? Chairman of the Jewish Communities of Russia. Started building his empire in the Soviet Union. He has paid billions of dollars in briberies for political favours. Very close to Russias president. Tell me about free countries again.
        By the way, those communist pigs saved many Jewish from the concentration camps. You’re problem is not with anti-semits. Is with those who see the dangers of free, wild capitalism.

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      • your naïve – there is no money out of thin air propaganda – there is only your propaganda that institutions lend money – they do not – they lend credit which is fraud – the federal reserve and the rest of the jewish banks never had any money and still don’t have any money – they lend credit fucking moron – the worthless money is entirely paid for by the people and the jew inserts himself as a middle man bond holder although we the people pay for the actual printing of the fake money… the national debt generated by the deficit spending walstreet jewish scam is complete fraud and punishable by the Blod Orn – you too will have Blod Orn in your rib cage = )

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    • A person who loses is a loser, not a looser. The word you used is the opposite of tighter. You do your argument a disservice by such a verbal gaffe.

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  4. Since when Greece is socialist????? You are asking me since when is Greece socialist? I live in Greece. There is no other counry in the European Union that is so interventionist. Don’t you hear the big struggle between the Europeans (European Commision, European Central Bank) and the American (IMF), and the greek political system? It is because our politicians do not accept to liberalize the economy. Trust me. The main economic player in Greece is the state.

    Until very recently, the dream of everybody was to work for the Greek state. In 1981, an ex communist Andreas Papandreou won the elections and surrendered the country to communists, under the socialist Hellenic party PASOK

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    • José says:

      Well I live in Spain, a country with a neoliberal government which is completelly upside-down. Our economy is more liberal than ever in our history, and the country’s in ruins. Ask Argentinians, Ecuatorians, Turkish (for example) what did IMF to their countries.
      I don’t know about PASOK, but in Spain, Portugal and France, the socialist parties are less socialist than ever. I don’t think PASOK is much too different, or there wouldn’t be SYRIZA

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  5. Wake up. It is not liberal. It is a socialist country that has to do reforms because of the collapse brought about by socialists. You do not even know what is what you call neoliberal. Neoliberal is a flat tax rate of 15-20% and that’s it. In Greece we have income tax ut to almost 50%, value addede tax of 23%, very heavy taxes on property, very heavy inhearitance taxes, heavy taxes in gaz, cigarettes and alcohol, and you name it. Open a dictionary to see what is a liberal economy

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    • José says:

      I’m glad to see that you know my country politics better than me. However, I don’t like being patronized. I’m wasting my time here, stay in your dream-world. Farewell

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  6. And anyway the issue is not Greece or Spain, but your propaganda of the “money as debt” style etc, that both communists and nazis are using

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  7. nacainte says:

    What a load of utter claptrap, go back to banking 101 and start again.as for the anti-semetic thing, that’s a pure insult to attempt to hijack an issue for racist purposes, there is something wrong with you my man.

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    • If you like to pretend that communists and nazis are different, you have every right to do so. But I have every right too, to believe that they are the same. I believe I provide adequate explanations of why this is so, at the following link
      http://iakovosalhadeff.hubpages.com/hub/Communism-Nazism-Two-of-a-kind

      Like

      • who gave Greece the first bailout in history? Adolf Hitler you stupid motherfucker – HAHA he propped up the greek economy with an influx of reichsmarks – its recorded by every world war 2 historian out there as well as the 500,000 greeks starved to death by America and England

        If anyone knows much about Greece in WW2 than here is something interesting. In the book After Daybreak by Ben Shephard there is a reference to OXFAM, Oxford Famine Relief. It says: in the mistaken opinion that deliberate starvation of Europe would weaken the German war effort a blockade was instituted which killed 500,000 Greeks. Here is a screen shot of the page I’m talking about, another atrocity blamed on Germany but perpetrated by England and America… We have also the Bengal famine that nobody even cared to document, you can’t even find pictures just sketches… The British Government didn’t care to starve people to death but were very willing to point their finger at Germany for things the Germans didn’t even do…

        for the screen shot go to a website of prestige not operated by a lying kike

        http://nationalconscience.wordpress.com/2013/09/17/golden-dawn-nationalist-party-in-greece/

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    • Not all nations are indebted as you say in your blog. All governments are in debt, and of course they are in debt, since they do not produce wealth. They tax their citizens, and they want to spend more than their receive in tax revenues, so they borrow.

      The countires that are net exporters i.e. countries that are running trade surpluses i.e. China, Germany, oil producing countries etc, are not indebted. Their governemnts are indebted. As countries, they are lenders to the rest of the world. The rest of the world owes to the producers of these countries.

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    • Listen to me my friend. You talk about the “greedy” banker, and nazis talk about the “jewish” banker. And the whole rhetoric is exactly the same. And you think that this word makes a huge difference.

      Shall I remind you, that people have been subjected to so much propaganda, that are sure it is the Jewish lobby controlling the banking system and the world? Therefore the fact that you are not using the J word, does not make you so much different. Listen to your propaganda about banking, and then listen to the nazi propaganda about banking. And then come back here and tell me the differences. Besides the J word.

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