What is it that you don&#x27;t understand.<p>Somebody owns some land, perhaps it was auctioned off by government. They plant trees(Adds value to the land). Lumber jacks pay to cut down the trees, and prepare the wood for woodwork(adds value to wood). They sell the wood to a woodworker, who crafts it into a chair(adds value to the wood).  Who then sells it. The owner of the land may plant more trees and the cycle starts again.<p>At each step more value has been added(using labour and skill), which people are willing to pay more for.<p>Money is injected into the economy via banks and government to represent the value of products and services in the economy. If you create too much money, for the amount of value created you get inflation. To little and you get deflation. Obviously this is overly simplified. You also have stuff like velocity of money.