If all money is created through lending, and all loans have interest, then there will always be more debt than there is money.
How can we be expected to pay more money than exists to afford the principle plus interest?
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SW-User
This is where inflation comes in and keeps increasing.
Invisible · 26-30, M
@SW-User Inflation has nothing to do with this
SW-User
@Invisible When there is less money circulating in the economy and more debt, inflation becomes a part of it, because money needs to be created. x
Invisible · 26-30, M
@SW-User The value of a dollar doesn't matter. The amount of money in the system doesn't matter. The only thing that matters is that all money that is created is loaned into existence.
Say I start printing Invisi-bucks and lend them to you. I give you $100 and demand that you pay me back with 5% interest. If there are no other Invisi-bucks, how do you pay me back with interest? At most you can pay the principle. You will always be in debt to me because there will never be enough money, even if I loan you more to make more interest payments.
Say I start printing Invisi-bucks and lend them to you. I give you $100 and demand that you pay me back with 5% interest. If there are no other Invisi-bucks, how do you pay me back with interest? At most you can pay the principle. You will always be in debt to me because there will never be enough money, even if I loan you more to make more interest payments.