Wealth distribution

[Fisherking]

LOL and the liquidity disappears where?

What part of the lending process negates the 0 sum game?

The gold standard was only a means of international money transfer. It was fixed by governments to a fixed amount in gold. But in order to increase money supply, reserves had to be increased.

Fait money is not the problem, as long as people have confidence in the value of the currency.

The system is not the same as it always was. The Banking systems of the past were not in control of currency. Governments were.

The problem is when banks create the money (or credit/debt). Repaying the loans result in no loss to the economy. Interest =Bank profits spent on operating costs and dividends put some of the interest payments back into circulation.

Bank investment, however, acquires real property (wealth) and concentrates it into fewer hands. In the past investment banks and lending banks were separate. That has also changed.

Simple taxation can not reasonably make up the difference. Governments too are borrowers. Their taxation merely goes to service their debt. Governments don’t control their currencies today, Central Banks do.

At some point the whole thing has to tumble down. Be it governments defaulting or banks defaulting or both.

It produces inequities but it has worked to some degree for over 300 years.

Sure it has.

There have been collapses too in the past. Something left out of HT’s “it’s just the way its always been“.
These were just extremes in the cycle.
Too in the past everything was more localized. A particular bank might default depriving a community. Then it was whole nations. Today we have a globally interconnected system. What happens when it reached the breaking point. Do we need to test it?

We just need to find a better way of doing things.

Can’t we find a means to enrich those who produce wealth rather than those who simply make money available? Otherwise, we all become slaves to debt, if not on a personal level, at least on a governmental one.

Because if we don’t, we will surely end up with a barter system again.