Liquidity vs. Obligation: The Ghost Money Hidden in Rent

by Apostol M. Alexandru

Every month, I pay 500 euros in rent. According to the law, my landlord owes 10% in taxes from that income. Whether he pays that tax immediately or waits until the end of the year, the amount owed remains the same—10% of what I’ve paid him.

Mathematically, there should be no difference:

10% of (12 × 500) = 12 × (10% of 500) = 600 euros in total tax.

So why does the timing matter?

Because the timing of tax payment determines whether that money generates other transactions in the economy—or not. And that’s where Ghost Money enters the picture.

Ghost Money: When Unpaid Taxes Fuel Illusions

If my landlord pays the 10% tax right after receiving the rent, then only 450 euros remain for him to spend. The rest goes to the State. The economy runs on real, taxed money. There is no inflation of liquidity. There is no Ghost Money.

But if the landlord doesn’t pay the tax immediately—and instead logs it as a future obligation—he keeps the full 500 euros and may spend all of it.

That 50 euros, which should have gone to the State, now enters circulation. It buys things, pays wages, creates invoices, fuels more activity.
It’s as if the money is his—but it’s not.
It belongs to the State, and it's only temporarily borrowed from the future.

This is the birth of Ghost Money:
A hidden liability circulating as if it were real liquidity.

Let’s Break It Down Clearly

1. Immediate Tax Payment (No Ghost Money)

I give the landlord 500 euros.

He pays 10% (50 euros) in tax to the State right away.

He is left with 450 euros.

Only 450 euros enter back into the economy.

No Ghost Money is created.

2. Deferred Tax Payment (Ghost Money is Born)

I give the landlord 500 euros.

He owes 50 euros in tax but doesn’t pay it immediately.

He spends the entire 500 euros.

The 50 euros that should have gone to the State is used like it belongs to him.

That 50 euros becomes Ghost Money—a debt masked as liquidity.

The Illusion of Wealth from Deferred Obligation

In practice, deferring taxes extends the illusion of prosperity.
It keeps liquidity flowing. It makes the economy feel larger than it actually is.

But this is dangerous.

Because at some point—tax day comes.
The landlord will have to pay the accumulated taxes.
But the money is no longer in his pocket.
He spent it. Someone else spent it. And the next person too.
The entire system has built invisible debt—a trail of Ghost Money.

Ghost Money Defined

Ghost Money is born when taxes are recorded but not immediately paid.
It occurs when money circulates as if it’s fully owned, even though a portion of it legally belongs to the State.
Taxed money is clean and finite.
Untaxed money is inflated, recursive, and misleading.

Why It Matters

Most modern economies operate on deferred taxes—from rent, income, investments, capital gains, and corporate revenue.
And worse: governments often borrow against those future tax revenues, injecting even more money into the system before it truly exists.
This creates asset bubbles, public debt, and eventually—systemic collapse.

Ghost Money is not just an abstract idea.
It explains why we feel rich in the short term, and broke when it matters.
It explains hidden inflation, sovereign debt, and why economic crashes always seem to arrive after years of apparent growth.

Final Thought

If we paid taxes immediately—like a VAT at the moment of every transaction—Ghost Money would not exist.
But that would drain liquidity fast and slow down economic activity.
So we defer. We delay. We pretend.

And in doing so, we create money that doesn’t really exist.
We inflate our economy with obligations disguised as wealth.
That’s Ghost Money.