Lets talk about how the money system works

I put this in IMHO because I understand far less than everything on this topic. What I think I understand may be flawed or just plain wrong. I welcome both further education and correction.

In another IMHO thread, Vertizontal says:

Very few people do.

It’s because it’s too simple. And kind of scary, too, actually.

The Federal Reserve simply makes what they call a loan. I say it that way, because in order for you or I loan money to a friend we must HAVE it first. the FR doesn’t actually HAVE the money before they loan it. It is either printed, or created as a spread sheet entry. They “loan” the money into existence.

This new money, they “loan” to member banks…at an interest rate. Who loan then it to thier customers at a higer interest rate.

So if they loan $1 over the life of the loan, they (the Fed, acting through member banks) will expect back $1.25. Think about where that $1.25 comes from. See any problem here?

ALL the money comes from this same source. So over some term, they are expecting back 25% MORE money than they created in the first place. Since they are taking more in loan payments than they are creating, eventually such a system will suck ALL the money out of the economy.

The only way this is sustainable is if they keep accelerating the rate at which they create money. This is called inflation. The system of loaning money into existance guarantees that there will always NEED to be inflation so that there will be enough money to pay back the loans that created the money in the first place.

If all this sounds like a confidence scam to you, your in good company.

One alternative is for the US government to create the money, (The Federal Reserve is a private company with government oversight) and then just "spend it into existance. " They can pay the government workers, military, military contracters with money they print. This money will have value, because the same government that created it will also accept it in payment of taxes.

This was done during the civil war. It worked. It also deprived bankers of thier (literally) cash cow. Bankers then, as now, are influential with law makers. The
system was changed the Federal Reserve created, and has been making bankers rich ever since.