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Stuart L. writes:

Money created out of nothing is indeed “worthless” to the economy as a whole, but it is not worthless to the borrowers. Borrowed money, including money created out of nothing, can be used to purchase goods and services, just like any other money. When money is created out of nothing, it is injected into the economy at a particular point, and then works its way through the economy, raising prices. Some people get the new money relatively early, before prices have risen, and they are the beneficiaries of the new money. Other people get the new money relatively late, after prices have already risen, and they are the victims of the new money. The initial borrowers of money created out of nothing are the first people to get the new money. Instead of being victims, they are in fact the biggest beneficiaries and victimizers (aside from the lenders).

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