The creation of money might be a 'paper exercise' but it is money that is real enough in the hands of consumers.
Extract from an article at: http://au.blogs.yahoo.com/michael-pascoe/69/good-news-is-bad-news this week (not a particularly good article but it does show that the Australian RBA (The Fed) is quite unequivocal in telling 'us' exactly what they intend to do, dependendent on future circumstances, and that they do regard a diminishment of wealth 'on paper' as a surrogate for interest rate raises). "......from the RBA's last board meeting. After the quarterly statement on monetary policy last week, no-one really expected anything particularly new or important in the minutes. How wrong we all were. It came as quite a shock to find that the RBA was within a coin toss of lifting rates by 50 points on February 5, rather than 25 points. And our central bank as good as promised to lift rates by another 25 points on March 4 unless the world's financial system (credit market) implodes before then, with a further rate hikes on the agenda if we (Australians) don't stop enjoying ourselves with higher commodity prices, lower unemployment and a rural recovery". (Of course no one in America would consider 6+% cheap.... and they call us the "Lucky Country"). brian_z
