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

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

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

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

If you enjoyed this essay you might want to have a look at some of the following essays too:

The Socialist Myth of the Greedy Banker

The Socialist Myth of Economic Monopoly

The Socialist Myth of Economic Bubbles



40 thoughts on “The Socialist Anti-Semitic Myth of the Creation of Money out of Thin Air”

  1. Pingback: Quora
    1. 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


      1. 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?

        Liked by 1 person

      2. This is a reply to your whole piece:

        Why do you feel the need to involve national-socialism and communism (when the name and history already point to equally inhumane atrocities and an extremist view of social order) into a discussion about money creation? Are you maybe a bit outside your “field of expertise”?

        Read the Bank of England’s QB 1 2014 and find the quote “…out of thin air…”. Reality check.

        It makes me sad to read your answers to people’s honest replies and posts after they have spent their time to actually read through your stuff and try to discuss other views. You simply shout out your world views, don’t answer questions, don’t therefore seem to think at all for yourself, but act like a bully who’s ran out of arguments to pull race and religion into a discussion that first should be merely objective 1) what is? and second start a subjective but productive discussion 2) where do we want to go from here?

        Why do I even bother…?


      3. I have postgraduate studies in economics, and I have the ACA (chartered accountancy) equivalent of my country. It can be very frustrating to talk to people who not only know nothing about economics or accounting, but they have also read too much communist or nazi propaganda.


      4. You use the word “thin air”, but that is something very different from what is going on in your head. But If you could understand you would have already understood by reading the essay.


  2. 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.

    Liked by 1 person

    1. 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.


      1. “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.


      2. 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


      3. 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.


      4. 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.


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

        Try to give a chance to Rothbard. It is free

        Click to access 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.


      5. 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).


      6. 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

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


      7. 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.


      8. 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 = )


  3. 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


    1. 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


  4. 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


    1. 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


    1. You don’t understand the Fractional Reserve system. Go and study the Bank of England’s documentation in this regard. How it works is that someone who makes a “loan” from a bank, signs an IOU agreement with the bank. The bank creates credit out of that IOU. The supplier is paid with that electronic money created on the IOU of the debtor. If the debtor then honours the agreement by paying back the IOU, the books are balanced which you should understand. What is WRONG is that the banks charged their banking fees AND INTEREST on money which they created from the debtors IOU. This system allows them to create more loans, and therefore make more money on compound interest, than a FULL RESERVE system would do. Under a full reserve system, they would only be able to make money on fixed deposits which earn interest. Then the interest they make would be the difference in the interest they pay and the interest they get. That’s not difficult to understand is it?

      They cannot use money in current accounts as that normally is used within a month so they will pretty soon run out of money if they use money in current accounts to makes loans with. Or they will have to have very sophisticated mathematical models plus a very good historical transaction history on how much of the money in current accounts can be used to make loans. But that will be a huge risk. Or they will have to commit fraud by fraudelent accounting or counterfeit money.

      But under a fractional reserve system, they get most of the interest minus a tiny portion of interest on reserve bank funds which they use to daily settle the difference between money owed to another bank and the money they owe the other bank. If they make loans to buyers who buy only from sellers with accounts at their bank, there is no interest to pay to the reserve bank as they don’t need reserve bank money to pay themselve.

      So you are correct that money is not created out of thin air but created on the IOU agreement of the borrower. This is all electronic money. Only notes issued by the Central bank and coins issued by Mint / Treasury, i.e. currency, is not included in this. But banks create loans electronically, not with physical cash. And I have not heard that e.g. sellers of houses wants all that money in currency. Large amounts are preferred electronically.

      To bring anti-semetism (racism) into this issue is a red herring. After WW2 and German concentration camps, anti-semitism = nazi = genocide. So people being afraid of being labled anti-semite, would then not disagree with you and others you use the same ruse as that will equate them with nazis. As an academic, you should be ashamed of using such a smear tactic to bolster your incorrect and weak arguments.

      Btw are Palestinians who speak Arabic, Semites? Are people who are opposed to and discriminate and oppress Palestinians anti-Semites too? If not, why are Jews and Israelis, who speak Hebrew, regarded as the only Semites so that anti-semitism equates to anti-Jew, anti-Israeli, anti-Hebrews? Is that not quite strong racism, to regard Jews/Israelis/Hebrews as the ONLY Semites? According to linguists Aramaic, Hebrew and Arabic are all classified as Semitic languages so that all who genetically originate from traditional speakers of those languages should be Semites and all who discriminate against them on ethnic grounds, should then be called anti-semites. So what happens when one Semite group discriminates against another Semite group based on ethnic grounds? Is that semitic anti-semitism. I know that the word Anti-Semitism was coined by a German who didn’t like Jews, but maybe he also disliked Arabs and used the word for BOTH Arabs and Jews. Is it not much better to use linguistically accurate terms such as anti-Judaism (for those who discriminate against those who relate to the tribe of Judah) or anti-Israeli (discriminating on ethnic grounds against modern Israelis as the tribe of Judah is the only remaining one of the original 12 tribes of Israel) or anti-Hebrew (for those who discriminate on ethnic grounds against Hebrew speakers).

      Btw, it is incorrect to regards all religious Jews as semites as they are not fully genetically related to original semites as during their 2,000 years in Europe & Asia, for two reasons. There were conversions to Judaism in Europe before Christianity became the state religion of the Roman Empire andJews intermixed with Europeans and Asians and did not even speak a semitic langauge but Yiddish, which was only spoken in eastern Europe. A large percentage of Askenazi Jews are related to the Khazars, a Turkish tribe which has been genetically verified by an ex Israeli geneticist in England.

      I know that the argument is used that only the rulers of the Khazars converted to Judaism but that simply is not realistic as the rulers in those times, especially authoritarian ones, required their followers to convert to their religion. This is the history of monotheistic religions. Roman emperor Constantine, and all, except one who followed him, required all citizens to convert to Christianity. And European kings who followed “pagan” religions, always required those they ruled, to convert to Christianity as soon as they themselves converted. This is the history of Christianity in Europe and after that, in European colonies.

      The same goes for the Islamic conquests. The Persians, Zoroastrians, all had to convert to Islam or die or be exiled or suffer economic discrimination. Do you think the Khazarian rulers, who were very warlike and ruthless, would not require their people not to convert to Judaism? This goes against the grain of historical evidence. Rulers do that so that they can be regarded as the head of the religious order and have the priestclass to indoctronate those they rule in order to rule with the least amount of military force, which is expensive. And to get soldiers to die for the ruler, they need religion to indocrinate the followers as people are emotionally controlled by their superstitions. Monotheism is from a political view advantagous to rulers as they then only have to control a single priesthoods to control all the believers of that religion and not a number of priesthoods as would be the case under a polytheistic belief system.


  5. What a load of utter claptrap, go back to banking 101 and start 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.


      1. 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


    1. 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.


    2. 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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