Report Why Would Money Exist Before I Borrowed It? in House prices and the economy Posted December 9, 2013 People on here frequently moan about banks creating money out of thin air when one gets a loan but the more i think about it the more reasonable it . Money is, amongst other thngs, effectively a numerical representation of the value of work, in this case mine, allowing me to exchange my output or my skills for the output or skills of someone else, or lots of other people. By taking a loan, i'm saying i want to spend the output of my future work (represented by a numerical value of money) now, prior to doing the work i.e I'm taking my future work output, something which doesnt yet exist and bringing it forward to today. So until I decide to bring my output forward why would the money that represents it exist in this current time? Also, it seems like I'm the one creating the money from thin air too, not the bank. Money is a representation of a claim on a share of resources & labour. For you to spend resources & labour they must exist. You can't buy bread if none has been baked. In other words, you aren't spending the results of your future labour. You are spending the results of someone else's finished labour. That labour is completed, so the claim to it must exist, so the money must exist.