DislikedI'm actually really curious how the world would be if we would let go of ALL the money and currencies and ONLY trade in commodities. Unable to "print more".. there just IS a certain amount of gold/silver/diamonds/oil etc. in the world and that's it.
What would our world look like if we just ONLY traded these? Buy a new car? pay with diamonds.. buy a piece of steak? pay with silver etc.
Just let go of all the BS that comes along with all the abilities that currencies come with.
Anyone have a view on this? I'm not an expert (yet!? lol) but I'm...Ignored
That means that 100,000 needs to be physically kept by the bank and the other 900,000 they can loan out to other people... And of course earn interest on that loan and in effect "create" money as people say... this is where the conspiracy theorists rest their case that the fractional reserve system is evil... But where does that 900,000 go?
Lets say the entire amount goes to an entrepreneur who is starting up a new business then where does he deposit that 900K when he receives it? Into a bank! So again the bank receives the 900K and they only have to keep 90,000 (10%) of it and the rest they can loan out... The process starts all over...
So... lets go back to the first loan of 900,000 to the entrepreneur... What does he do with this money? Firstly he is hopefully credit worthy so that initial capital will be put back through the system.. secondarily his entrepreneurial efforts will hopefully create jobs (employment) which in turn mean that the employees can afford food (which supports the local super markets) who in turn can pay their workers who can afford to by food etc etc... Education, etc etc you can see how it goes on and on through the chain benefiting many people, so the economy as a whole will hopefully get BACK more than the 900,000 that was initially "created"
So going back to your question... How will this be done if the supply of gold or silver is FIXED? it can't... Money was initially created when the banks were on the Gold system meaning that the notes (money) were simply "rights" to a part of the banks gold to whatever the value of the note promised them...
I would imagine that by having a fixed gold or silver supply as money would create the biggest gap between rich and poor ever. In fact this would be like the ancient days where a privileged few own the "wealth" and everyone else slave for them///
Not that much has changed these days lol but things would be more pronounced I would imagine... When a monetary supply is fixed then that's it! It filters up the pyramid until the rich have it all and enslave the rest of the nation
Anyone else have any thoughts on this?
EDIT: I've seen Zeitgeist and all the rest and although they make a case it is very one sided (extreme) Banks play a very important role in our free economies... I don't believe they're as evil as everyone makes them out to be
Time hides Nothing