posted on Oct, 21 2007 @ 04:25 AM
When I was very young, my parents explained how they could go to the bank and borrow money, it involved paying back MORE money than they borrowed
because the bank charged interest. This absolutely perplexed me, where did this extra money they charge come from? It just poofs into existence from
If the Federal Reserve charges interest on every dollar they give the government, the people owe the Fed more money than exists.
American Debt in 2004
I believe it's over $2.4T now... (This is non-mortgage debt)
So... what happens when Americas private debt exceeds more money than exists? How much money is the Fed going to continue pumping into our economy?
If the Fed stopped creating money from thin air, what would happen? Finally, why does the Fed need to create money out of thin air? To be honest,
I'm not really looking for an answer to these questions, I hope to get people questioning the things they've grown up with.
I understand how and why banks charge interest (I own a car and have a mortgage)... To offset risk perhaps banks should, instead, be a bit more picky
about who they give loans to or maybe create a more strict legal penalty for defaulting on a loan? Of course, the best thing would to give people
enough money so they don't NEED to take out loans... But that branches out into another topic, and I don't want to go there.
Just because we grow up with a practice that has been going on for generations, it does not mean that practice is good or fair; it means that people
don't always examine the world around them.
I had a short discussion with my brother about this... and he completely failed to see my point, I hope I explained it better on here.