Money DOES Grow on Trees

4 min readJul 18, 2021
Photo by Joshua Hoehne on Unsplash

You’ve heard the saying…

“Money doesn’t grow on trees.”

This common expression is used to emphasize that money is a limited resource. It’s finite and not easily acquired. So you shouldn’t go around spending it carelessly.

I want to challenge that. Money DOES grow on trees.

Fiat Currency vs. Money

Before growing yourself a money tree, you need to know the difference between “fiat currency” and “money”.

Fiat currency is a government-backed piece of paper with a value written on it. We commonly & wrongly refer to fiat currency as money. It only has value because the issuing government and the people give it value. The value we impose on it isn’t inherent, it’s “symbolic value”. Some examples of fiat currencies are US Dollars, EU Euros, Japanese Yen, and so on.

Real money can be used like fiat currency, but instead of being a piece of paper that holds only the symbolic value the government says it has, money holds high relative value when it functions well as a medium of exchange. Real money are things like, gold, silver, and Bitcoin.

The reason these things count as money and not just currency is because, fiat currency can be printed endlessly (because paper is in great supply), where gold, silver, & Bitcoin have a stable supply that cannot be altered substantially enough to be exploited.

Basic economics teaches us that something in low stable supply, but high demand will hold sustainable value. This is just like gold, silver, & Bitcoin.

In the past, paper currency used to be “backed” by gold. In other words, a single $20-bill could be transacted directly for $20 worth of gold from the banks vault. This system of backing would insure that the paper money would hold the same value as gold. There was an equal 1:1 dollar to gold ratio in America, until a series of events unfolded over 38 years, leading us to the fateful day when President Nixon announced the USA would be abolishing the gold standard.

Equipped with this basic knowledge, you can grow yourself a money tree.

How the banking systems grows money trees

As you learned above, our current banking system utilizes fiat currency not backed by gold. This means that banks can exploit currency to create “money” out of nothing.

The banking system creates money out of thin air using something called Fractional Reserve Banking.

FRB is a system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal.

As of 2020, the reserve requirement (set by the Federal Reserve) is at 0%. This means that banks don’t have to hold any currency in their vaults to loan out money. So you may be wondering, “Where is this currency the banks loan out coming from?”

We are taught that the banking system works like this:

  1. We deposit our money
  2. Our money is lent out in the form of loans with an interest rate attached
  3. That loan’s interest rate is used to cover the banks operating costs and give our savings accounts a interest rate

But the banking system actually works like this:

  1. Our deposited money is a liability for the bank, because they owe it back to you.
  2. They use your money as a reserve to take loans out from the government at ridiculously low interest rates.
  3. This newly created currency is then used to create loans, pay for operating costs, & pay your savings account’s interest rate.

Since the bank uses your currency to take loans out from the federal government, they are able to “grow money”. The interest you receive is inflation.

But, what does this mean for you?

What this means for you

The federal government can cut down trees, make paper, and then print more currency for the banks to loan out. Essentially growing money trees.

This means that there is an artificially created supply increase in the currency. Which creates inflation! The more inflation, the less buying power you have.

In other words, the federal government and banks are counterfeiting their own currency with a cherry of committing fraud on top. This leaves you more empty handed as time goes on.

What can you do now? You have 2 options.

1. Keep your fiat currency & hope everything will work out

2. Transact your fiat currency for real money like gold, silver, and Bitcoin.

If you need some extra help locating real, sound money like above, I recommend watching episode 1 of “Hidden Secrets of Money”. This series is an indispensable resource for learning about the history of money. I highly recommend watching it if you are interested.

Lastly, if you enjoyed what you read, you might also enjoy another article I wrote titled, “Is the USA as free as You Think?”.




I skipped college, now I write for fun and not for grades.