alpraz0lam

10/10

It could have been cut together better, but this doc does an excellent job of explaining a key concept most people, even those who study economics, don't understand: Money is created when commercial banks issue loans. When you borrow money from a bank, it does not come from deposits, it is created as new commercial bank money. As alluded to in the title of the doc, 97% of all money in the economy is created this way. Fiat currency would not exist without copious amounts of new debt being issued. Perhaps more relevant today than ever where we're living through the effects of both high inflation - an inevitable consequence of such rapid money printing - and high interest rates within an economy that relies solely on borrowing to continue. Without an ever expanding monetary supply from cheap borrowing, our entire economy grinds to a halt as no new money can be issued. But with it, the money quickly becomes worthless due to rapid inflation. The only viable fix for this is a return to sound money. Fiat currency fundamentally is not a form of sound money. You need a currency with a fixed supply, such as one backed by gold, or arguably for the modern age, a digital currency with a hard cap on supply like the one Satoshi Nakamoto created.