While money and credit are associated with wealth, they aren’t the same thing as wealth. Because money and credit can buy wealth (i.e., goods and services), the amount of money and credit you have and the amount of wealth you have look pretty much the same. But you cannot create more wealth simply by creating more money and credit. To create more wealth, you have to be more productive. The relationship between the creation of money and credit and the creation of wealth is often confused, yet it is the biggest driver of economic cycles. Let’s look at it more closely.
