The Narrow Path Ministries

Steve 7150 wrote:I'll read your example Paidion but here in the USA the money supply increases every month because the Federal Reserve prints the money as it sees fit and distributes it to banks who may or may not lend it out. When loans are repaid the money does not go out of existence, it remains as part of the money supply and the money supply always grows. If it grows to fast it can create or exasperate inflation.

Here's some reading material that I just discovered 5 minutes ago that may help you to understand. The first one is dealing with the creation of money in England, but the same system exists in United States and Canada. Money comes into existence as a debt. It should come into existence as a credit. It is created through loans. Please listen to the short video that accompanies the first website. It affirms that money disappears when loans are repaid.

http://positivemoney.org/how-money-work ... ate-money/

http://www.pbs.org/newshour/rundown/why ... -not-evil/

Here's some reading material that I just discovered 5 minutes ago that may help you to understand. The first one is dealing with the creation of money in England, but the same system exists in United States and Canada. Money comes into existence as a debt. It should come into existence as a credit. It is created through loans. Please listen to the short video that accompanies the first website. It affirms that money disappears when loans are repaid.








I listened to these but all i can say is that "Banks" are wholesalers of money, they don't create money. Banks buy money from the Federal Reserve at the Discount Window for a low rate of interest and turn around and charge their customers a higher rate of interest when they lend it out.
Also i've never heard of money being destroyed and i do know the money supply always grows at a rate usually higher then the rate of inflation. Only the Federal Reserve can create money in the USA. The growth of the money supply is a closely watched indicator in this country. Money could indeed be created by the Federal Reserve as a credit but then it would add to the Money Supply and may cause inflation. It probably would because anytime you increase the supply of something without any actual increase of value then each unit will become worth less simply because there are more of these units. That's why many people think returning to the gold standard is a good idea.