Farley on Nostr: Creating new money that has no real wealth backing it, from an ethical and moral ...

Creating new money that has no real wealth backing it, from an ethical and moral perspective, raises significant concerns. When central banks issue new currency, they do so without directly borrowing existing value; instead, they create new money out of thin air. This process can be seen as morally questionable because it effectively transfers value from existing money holders to those who receive the new money first.

The "debt" in this context is often to the general public. It is a debt to the economy as a whole, as the creation of new money devalues the currency and erodes purchasing power. Ethically, it’s problematic because it represents a form of hidden taxation: existing money holders are forced to absorb the loss of value caused by the inflation of the money supply. This system can disproportionately affect those who have less financial resilience, creating a moral hazard where the benefits of new money are not equally shared, and the costs are often borne unfairly by the less privileged.