The question was asked by “jelly bean”
It seems the money we borrow for mortgages and other loans is just printed on a statement or its on a computer screen for us to look at. It seems to me that a small amount is out there which when printed has interest slapped on it, and is impossible for a government to pay back. Why is interest put on money that is printed and not just a fee paid for printing the money. Anyway, if we all took our money out of the banks, that's cash by the way, not a bit of paper, would it cripple the banks and bring the country to its knees. That's if they could????
The question was answered by “old know all”
Money doesn't exist. We live on credit based on numbers on computer records. Until Charles II, we used gold. The richer classes kept their gold in the Tower of London, but the king helped himself (he probably called it wealth tax). So people took to keeping their gold in the secure vaults owned by the Goldsmiths Company. Rather than get the gold out to pay for stuff, you got receipts for your gold from the Goldsmiths Company and you could use these as money. When a receipt changed hands, so did the ownership of the gold. Under ecclesiastical laws, Christians in England were not allowed to lend out their gold and charge interest. That rather stifled the newly formed joint stock banks. However, the banks found they could issue receipts for gold that didn't have and lend them out on interest. People treated them as money and it got round the laws on usury. Our entire financial system is based upon that con. Our standard currency are bits of paper signed by Andrew Bailey promising to pay you five pounds. He hasn't got five pounds other than his bits of paper. If you seek out Andrew Bailey and take him up on his promise, all he can offer you is a clean one.
However true this may be, it does exist for us mere mortals otherwise living our luxurious lifestyles would not be possible, the powers allow banks to repossess, stores will not give away food or cloths and all the rest of it and for a government an acceptable rate of inflation, because money is imagined into existence the amount that is in the system has an effect on its value and our lifestyles. For instance if everyone has one million dollars, then how much value is that? The system of goods and services will calibrate itself accordingly to the point where the medium becomes dysfunctional. So how does a government hide inflation? by getting the other guy to do the same, then the indicator for inflation becomes the price of rare metals such as gold that are not so easily inflated. Another word for inflation is devalue and is the act of simply printing paper money.
Gold was at $20.65 an ounce in 1833 and it was $40.80 an ounce in 1971. Mid 2011 price of gold price was $1,577.58. Taking into account and subtracting demand there is inflation, that means it takes a bit more green to buy the same amount. Inflation is necessary to keep the economy, more importantly everyone humming along with a decent standard of living but not many people, organizations, oligarchs care about that when there is money to be made. Their is an environment of economic warfare and nations are free game, why would a government knowingly borrow more money that its GDP? those debts have to be paid, it can simply print the money but that will cause inflation. Fair to say that the governments and the oligarchs, corporgarchy who pay no taxes will reap that arbitrary inflated number while the rest enter into a virtual arrangement or no change to their wages for the same amount of work done.
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Four out of the five are government funded, the other utilizes slave labor.