AN ANALOGY TO EXPLAIN THE FRAUDULENT NATURE OF MONEY CREATION BY BANKS

First, the comment that I'm responding to:

Sugar1:
"Sure every bank is in business to make a profit. If you have a business don't you expect to make a profit. I sure wouldn''t call it fraud if you did. Get your head on straight!"

The analogy:

Of course I don't begrudge anyone their profit. But suppose the way I made a profit was by producing sugar pills (i.e., a placebo) that I was allowed by law to sell as a cancer treatment. Suppose that I could just crank out sugar pills with nothing in them but ordinary sugar, but the government allowed me to market them as a cancer treatment with ingredients besides sugar that have been proven to treat cancer. In fact, the government supports my marketing claim that the pills are useful for treating cancer. I wouldn't have to pay for any research on cancer treatments, I wouldn't have to pay to have any medicines developed that actually treat cancer.

Let's further suppose that the government required all cancer patients to buy my pills from me, even though they're just sugar pills, or placebos. And no one else can make these pills but my company. And so I make obscene profits off my simple sugar pills that cost almost nothing to make. Would you find that at all objectionable? Shouldn't you call that fraud, even though it's all nice and "legal?" I should think so.

But that is no different than what is being done with the money supply. The money created by banks is equivalent to my sugar pills--it costs nothing to produce, everyone in the country must use it, and no one else is allowed to produce it. Just like my sugar pills are not in any way a cancer treatment--but the government says it is--money created by banks is not in any way real money, the kind that is derived from labor and productivity. But the government says it is real money and that we must treat it as such. This fake money is fraudulent, then, even though it is legal.