Wednesday, October 3, 2012

Does money create the presence of goods and services or do goods and services create the presence of money? Economists answer: Yes, No, well, maybe...

Stole this graphic below from my blogosphere friend, The New Arthurian.  Money, specifically MORE money, is MOST useful if there is a newly produced good and/or service AVAILABLE to exchange it for. Yes, I am a master of the obvious!

I guess it begs question(s): What comes first---money to buy a good or service or the availability of a good or service to buy with money?  Does money create wealth or does wealth create the need for money? 

(UPDATE: upon re-reading my first question, I find it to be very inelegant. Suggestions in how to re-phrase it would be helpful).

I don't really know. I can't quite figure it out. Seems like it depends----sometimes the chicken comes before the egg and somethimes the egg comes before the chicken.  That reminds me, I have to eat breakfast.

This is from a letter to the editor in 1933.  Is it still appropos today??

Source: The New Arthurian via Financial Times
If you want to get a deeper understanding of the relationship between "money" and "credit" and how these two merge (and diverge) to create the REAL problem with our economy---PRIVATE DEBT, then PLEASE visit The New Arthurian to get the scoop. 
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