The debt-based money system manufactures and guarantees poverty. This is a structural effect of private banking that is impossible to avoid. It is a game of winners and losers, with the losers far outnumbering the winners as the statistics on inequality clearly show. Let's examine this aspect of the unfair banking system.
First, let's take a look at the level of the individual borrower, you. You apply at the bank for a loan and if the bank deems you fit to receive one, they change the number in your account and voila! the new unearned money is there. The loan documents will tell you how much interest you will pay over the term of the loan. Let's use a simple example where you borrow $1000 at 5% interest for one year and so the cost of the loan is $50. The bank has created $1000 for you and you have agreed to repay $1050.
Now let's look at the money creation system on a grand scale. Imagine in your country that all the bank lending in one year totals $1000million at 5% interest. That's $1,050million that must be repaid. Do you see it? The banks have only created $1000m, yet $50m more must be repaid. In other words, the extra debt is unfunded, there is no possibility of it being paid.
It's not possible to overstate the brutal effects of this system. The banks are owed far more money than is in existence to pay that debt. Yet humanity struggles daily in a futile rat race, trying to earn enough money to pay back an unearned liability that grows by the second. This is the guarantee of poverty. It's also the guarantee of environmental degradation, with economists and politicians everywhere calling for more economic "growth", an imperative that the planet cannot sustain.
It's time we put a stop to this folly. All over the world, money reformers are working hard to get the word out. We believe it's the most important conversation to have with anyone who is concerned about the state of our planet. Please recommend this blog and the Positive Money website to your friends and contacts. Let's all work to end the financial regime that guarantees poverty and inequality.
Change money, change the world!