We love the “self-made billionaire” story. Gina Rinehart is often held up as the ultimate example—a powerhouse who turned iron ore into an empire. But here’s a question no one asks: where would Gina be without the Australian Government?
Specifically, how could she be a billionaire if we didn’t have ‘vertical money creation?’
Vertical money creation is what happens when the government spends new dollars into the economy. In Australia’s fiat currency system, the federal government is the only player that can create Australian dollars ‘out of thin air’ (which is the exact phrase that the Governor of the Reserve Bank of Australia used in May 2020). When the Government funds infrastructure, services, wages, or contracts, it’s pumping new dollars into the system. And it’s those dollars that allow the rest of the economy’s wheels to turn.
Now imagine a world without that government spending. Without vertical money creation, there are no dollars. No pay packets. No markets. No investors. No customers. Nothing. Where would the billions come from? How would workers get paid, or suppliers funded, or investors find cash to back giant mining projects?
A billionaire is someone with a billion dollars. How could you be a billionaire if dollars did not exist?
Sure, Gina Rinehart runs a world-class mining operation. But her success depends on a money system that literally lets business happen. Vertical money creation is the starting point. It’s what puts dollars into the hands of workers, customers, suppliers, and the economy at large. Without it, iron ore would stay in the ground.
So the next time someone says billionaires build their fortunes from nothing, remember: even the smartest business uses money that someone else created. No government spending, no dollars. No dollars, no billions. And no billionaires.