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originally posted by: TheBandit795
a reply to: ScepticScot
It has everything to do with vanishing. It's akin to matter and anti-matter. When matter and anti-matter meet. They destroy/cancel each other out. Fiat money and debt is created at the same time, when the two meet (someone pays their debt in full) they cancel each other out.
originally posted by: TheBandit795
a reply to: ScepticScot
Because it's fraud. If I want to lend someone money, I better have the full amount and be the owner of that full amount of money to lend to that person. Or else it's prison time for me.
originally posted by: TheBandit795
a reply to: ScepticScot
Because when the loans are paid back, because of the fact that the money is created at the same time the loan is created the money and the loan cancel out themselves, leaving nothing more than interest. So there is interest to be paid, but no money in existence to pay it. That's how it is generally.
It's explained more in detail in this video (also in the "money as debt" videos):
originally posted by: JAY1980
a reply to: Kuroodo
This is a good example of a fiat currency. I believe something like 60% of all US dollars are is in virtual format and the other 40% is in actual physical dollars.
Compound the situation when the dollars have no physical backing with a resource or commodity. We back our dollars with thin air and promises!
originally posted by: SouthernForkway26
Trading debt for something of value costs more in the long run. That can be fine for certain situations, but not for backing a currency.
originally posted by: SouthernForkway26
a reply to: ScepticScot
There IS a great accumulation of unplayable debt resulting from interest. That is the problem, the inherent evil, of our money system.
Money is created when a lending institution makes a loan. The interest portion of the loan isn't created. All of the collective money in the system would dry up before the collective interest on the loans could be paid. Essentially we have a system of perpetual refinancing. The compounding interest guarantees eventual collapse like every system except a gold backed currency.
I think a Bitcoin influenced currency will be the future. It will take a collapse of the current system first.
originally posted by: Aazadan
originally posted by: JAY1980
a reply to: Kuroodo
This is a good example of a fiat currency. I believe something like 60% of all US dollars are is in virtual format and the other 40% is in actual physical dollars.
Less, only about 1% of currency in circulation is actually printed. Not that it matters, what's the difference between a piece of paper and a few bytes in a computer?
Compound the situation when the dollars have no physical backing with a resource or commodity. We back our dollars with thin air and promises!
Actually, we back our dollar with three things. The first is foreign debt. The second is our own debt. The third is it's ability to trade for oil. All three of these things are very real. By owning other nations debt, we are saying that our currency holds the combined weight of all the other currencies in the world, it is an asset that our currency could always be exchanged from our debt holdings for something else of value. With our own debt, other nations are making the same declaration of faith in our currency, as are our citizens. It's a statement of belief that the debt will not default.