Goods, Money and Purchasing Power: Who Owns Money?, 3

The same applies to money having intrinsic value, such as gold. Let aside now whether this intrinsic value was fraudulently induced in the past by a monopolist, as of now money having intrinsic value is treated just as a commodity: the purchasing power of that gold was born when that gold was first exchanged after being mined, and it belonged to those who did the mining and incurred the costs of mining it.

The same applies to currency without intrinsic value, too, if it is treated as a commodity. If currency is treated as a commodity – let’s underline this – its purchasing power was born when that currency was first exchanged after being produced, and – here lies the magic trick – it was treated as if it belonged to those who produced it and as if they incurred the costs of producing something having intrinsic value. But notice currency does have quite a peculiarity in this aspect. It does not have any intrinsic value, not at all. And the costs and work to produce it tend to zero, when compared to its purchasing power, corresponding to its face value.

Currency being treated as a commodity means that people considers that currency has intrinsic value, which is false. But this leads people to consider that if currency has intrinsic value, then it also has comparable production costs just as commodities do, which is false. Or that there is a limited quantity of it available, just like a commodity, which is false, because there can be as much currency as those producing it arbitrarily decide to produce. And all this leads people to the idea that those who produce currency are entitled to the amount of purchasing power indicated on the currency’s face value, which is utterly false.