Bad Money

[Anders Lindman]

I heard that 5 billion credit cards were solicited in the U.S. each year. That's an astronomical number. Each year in America, the number of new bankruptcies is bigger than the number of new babies born.

The overall debt among the population is increasing year by year. The bottom line reason for this must as I see it be the fractional reserve banking principle. The more new money is created, the more debt is generated. In fact, the new money IS debt. That ever increased new debt has to be payed with new money since there is overall never enough money in society to pay off the overall debt. The new money needed to pay the debt of course generates new debt. This creates a vicious loop of ever increasing debt.

For the citizens in a society based on fractional reserve banking, the burden of debt as an average grows larger and larger. That's a bad system. That's bad money. Bad dog. Baaaad dog!

[joss classey]

so what we gotta do? burn the money?

[Anders Lindman]

Burning the money would not be of much help. The fractional reserve banking system, ruthless as it is, has nevertheless helped to create our modern and advanced civilization, and so it may have served a good purpose, but alas, fractional reserve banking has now grown into a Titanic debt monster.

Banks do not create money out of thin air. Banks create new money as debt. This ever increasing debt creates a heavier and heavier burden on the citizens. I would not call that thin air.

One of Ron Paul's messages is that he wants to change the monetary system, and he is very well aware of the grave dangers inherent in today's fractional reserve banking, as this video shows:

http://video.google.com/videoplay?docid=-8327695139643041382