Capitalism self-defeating?

Really the main reason of inflation is the decrease in the productivity and availability of goods. You shouldn't blame it on the interest.

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@Cyracuz,

Cyracuz wrote:

Money is created by means of loans. For every unit of currency that exists, there exists an equal amount of debt.
But lenders charge interest, which means that for every unit of currency, there exists corresponding debt plus interest. Since interest is added every time money is created, in the total economic system the amount of money owed will always exceed the amount of money that exist.

So more money is made to cover the interest, but that money too, generates interest. This is why we get inflation.

And it only gets worse. This appears to be a built in mechanic of the economic system itself, or in other words; the system creates the problem.
Strange that the problems are caused by us trying to solve them...

You sure you're not talking about central banks?

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@Ding an Sich,

Quote:

Money is created by means of loans.

Quote:

You sure you're not talking about central banks?

I think money mechanics is a lot of fun. I think everyone should spend at least 40 hours researching it and trying to understand it. I also think that they may be shocked by what they find.

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@reasoning logic,

I think that what they will find is that is is the greatest fraud of all time.

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@Cyracuz,

Quote:

I think that what they will find is that is is the greatest fraud of all time.

You are probably right but the truth is very few will give it the time of day to research it.

This an old video so I would think that the statement of physical money in supply would be lower

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It seems that Farrakhan may be on to something even though I do not follow him nor agree with a lot of what he says at times.

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@Cyracuz,

A QUESTION... hopefully someone can answer...

Since there is debt all over the world, can we all just ease monetary policy at the same time and reset to zero? so that no country would have any debt and those who didn't have any or less would just have a surplus? wouldnt that solve all the debt issues?

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what is all countries did QE-infinity? there would be no more debt eventually? correct? no?

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@Cyracuz,

True capitalism, no. Crony capitalism, yes.

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@Cyracuz,

Cyracuz wrote:

And when inflation gets too high, they can increase the interest rate, which drives prices down.

Correct – because MOST businesses operate on loans, as do most people…and when MOST operate that way, raising interest rates can work, as you say, to reduce inflation.

From another angle then – according to your theory - how do you explain the increase in inflation, when, overall, interest rates have been falling for the last 3 decades?

(never knew this thread was still going)

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Capitalism self-defeating?

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