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What does pay mean on a statement?

Zeitgeist Movement: What does the statement: "the interest to pay the loan that created the money does not exist in the money supply" mean?

  • from documentary movie Zeitgeist: Moving Forward.

  • Answer:

    Imagine you and I are the only people in the world. Imagine I have the only 10$ available on the whole planet and you want me to lend you them. I would act as the bank creating a loan of 10$ for you, expecting you to return it with an extra interest, let's say of 1$. Where are you going to get this extra money from, assuming there is no more money on Earth? Once understood this example, extrapolate it to all the money created in the real world. For some people to pay the interests, some others have to go bankrupt as the extra money to pay for the interests does not exist!!

Alejandro Catalá Espí at Quora Visit the source

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That statement in itself is faulty and limited. There can never be a world where only too people exist. If it exist, there will be no money,  but rather, trade by barter. The loan  given you is a "service" offered that need to be remunerated. This is the same like the remuneration given you for rendering a "service" to your employers. Hence, both should reflect in the money supply equation.

Peter Agbor

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