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RE: Banks Are Crooks, Inventing Money as Loans to Profit on Interest Payments
The problem with the bank is not that they charge interest, the problem is that the money they lend has not been saved. In a healthy economy, a free market economy, people must save money, part of that money people are willing to invest, so they deposit it in an interest-bearing account, in this way, the bank can lend that money to a greater interest, and that's how they earn their share. Now, none of that happens, what they do is totally immoral and is a theft to all of us.
Under that system, no new money gets created. If there is economic growth, there can't be price stability, or vice versa.
I think I did not understand?
You wrote:
If all money that a bank lends to customers must come from savings accounts deposited there by other people, then new money is not created by banks or any other lending institutions. How is new money supposed to be created? Or is it supposed to be created at all? If not, the quantity of money will remain constant which will lead to prices falling when new value is created. That rewards those who merely hoard money while not contributing to real-world economic growth in any way, all at the expense of the creators. How is that not theft? What constructive purpose is there to a medium of exchange being scarce?
There is nothing immoral about creating new money to match the new value created by an economic enterprise like is done when a bank creates money to issue a loan used to fund a project like building a new factory or a new apartment building.
What is immoral is individual banks having grown so large as to be able to force governments to bail them out if their risky investments blow up in their face. That is a clear example of a moral hazard.
Well, 2 things can happen, the first is that the amount of money remains constant, and as a result the money will gain more value, therefore, with a smaller fraction can buy more things, in addition to the growth of the economy would be natural and healthy, not like the false growths that we currently have, which are the product of credit expansion, so the problem of the shortages of money would take a long time to occur. The second way, it is as you say, issue new money, it is best to do it through credit, but we must take two things into consideration, the first is that the credit that represents new money must be equal to deflation, and the second, it is that whoever issues that credit will be directing the economy in a certain way.
Not necessarily, for them it is more beneficial to leave their money saved in accounts that produce interest in exchange for the banker being able to lend that money, from there to capitalism. Do they benefit if they do nothing but save? No, and that is well explained by Von Mises, if they do not invest their money in the way that gives the best possible performance, in the long run they will end up losing it, in such a way that it will be transferred to people who can find a good return from that capital.
If people demand cars making the demand exceed the supply, an increase in production will be necessary, then the factories go to the banks that lend to them instead of others, because they are willing to pay higher interest rates than the rest of the economic sectors, and that is because the cars are being more demanded than the rest of the sectors, in such a way that the money of the savers is destined to increase the production of cars.
Currently, the fractional reserve system is generating a robbery, because not only is it lending money that it does not have, for something there are bank runs, as in the case of Argentina, but they make a transfer of capital from people to them, through inflation, when printing new money and to the east impact on the economy, it generates inflation, which makes the money that I have earned with my effort, worth less.
No, the immoral thing is not to create money, the immoral thing is to lend something that is not theirs.
In fact, I have an idea of how a national economic model should work, and basically I took the idea of them and transformed it to put it to work for the benefit of society, but I will talk about that economic model in a future publication.