Isn't an interest rate as we know more than 0%? It's kind of like a promissory note to pay back X amount of money over time with Y interest rate, as a fee for the service of borrowing money.
The problem with your analogy is that even if there were a fixed amount of currency, there is never a fixed amount of wealth.
Some people are more productive than other people. Most people are productive to some degree, and their productivity creates ever more wealth.
One of the individuals on your desert island might be more productive at acquiring things that others would like to have: fish, coconuts, wild boar, palm leaves, whatever.
When that happens, a fixed rate of "money" (or "currency" which is what you are talking about) can be sliced up into more bits. My 10 fish that I used to sell for $1 can now sell for 50 cents because I was so productive with my new technique in fishing that I caught more than I expected. Therefore, the value of each fish is less due to an over supply, and that over supply is due to increased productivity.
This increased productivity drives prices down, and increases the value of each dollar, relative to the wealth. So there is no reason to "print more money" -- unless you want to steal the wealth of others -- since total wealth is always increasing, due to productivity always expanding.
The BIG problem that most modern day "economists" have is they do not understand that human productivity is the main driver of a prosperous society.
It is NOT consumption. It is productivity. This is WHY an economy gets destroyed by any form of socialism. Socialism/communism (same thing, ultimately) destroys economies because it disincentivizes productivity, and productivity generates wealth. A lack of productivity reduces wealth.
Money is just a scorecard. It is not the essence of wealth itself.
Central banking and centrally-planned government destroy wealth to benefit the insiders, but they produce nothing of value for society as a whole. They are merely parasites.
Isn't an interest rate as we know more than 0%? It's kind of like a promissory note to pay back X amount of money over time with Y interest rate, as a fee for the service of borrowing money.
Yes.
Usury can also be defined as “the charging of money, for the use of money”
So, like ATM fees are USURY,
Because they charge you money, to use your money.
But interest,
And especially compound interest,
Is always unsustainable over the long run.
Lets say two people are on a desert island,
And they each have $1 x 10
Lets say each day, they can trade their dollar bills for whatever they want.
Lets say person A fanagales a deal, where they “own” the island,
and the other person B has to pay a $1/month “tax” for the priviledge of living on his land.
How many months can this system go on, before person A has all of the money, and person B is broke.
This is a closed loop system.
Now use that model, and apply it to millions of borrowers.
The banks loan out $100, and expect $106 in return.
Where does the extra $6 come from?
It doesnt exist, within the context of your loan,
So you have to HUSTLE,
meaning you have to HUSTLE SOMEONE ELSE OUT OF $6,
There are a limited supply of $1 bills created, and therefore everyone must HUSTLE to get their $6,
Or else the bank takes the car
Or the house
Or whatever.
So they have to “spend” enogh dollars into circulation, to match the demand for dollars.
Things like government spending.
Build a road, spend millions of $1… money in the economy.
Stop building roads, millions of $1 disappear from circulation.
The problem is, the government spending gets more and more absurd,
Where we are sending $BILLIONS to Ukraine
Waste Fraud Abuse
Doesnt matter HOW the dollars are spent into circularion, so long as they are spent.
Too many dollars in the economy?
Just raise gas prices for a few months, and drain everyones savings account.
Now everyone is back to hustling for dollars.
The problem with your analogy is that even if there were a fixed amount of currency, there is never a fixed amount of wealth.
Some people are more productive than other people. Most people are productive to some degree, and their productivity creates ever more wealth.
One of the individuals on your desert island might be more productive at acquiring things that others would like to have: fish, coconuts, wild boar, palm leaves, whatever.
When that happens, a fixed rate of "money" (or "currency" which is what you are talking about) can be sliced up into more bits. My 10 fish that I used to sell for $1 can now sell for 50 cents because I was so productive with my new technique in fishing that I caught more than I expected. Therefore, the value of each fish is less due to an over supply, and that over supply is due to increased productivity.
This increased productivity drives prices down, and increases the value of each dollar, relative to the wealth. So there is no reason to "print more money" -- unless you want to steal the wealth of others -- since total wealth is always increasing, due to productivity always expanding.
The BIG problem that most modern day "economists" have is they do not understand that human productivity is the main driver of a prosperous society.
It is NOT consumption. It is productivity. This is WHY an economy gets destroyed by any form of socialism. Socialism/communism (same thing, ultimately) destroys economies because it disincentivizes productivity, and productivity generates wealth. A lack of productivity reduces wealth.
Money is just a scorecard. It is not the essence of wealth itself.
Central banking and centrally-planned government destroy wealth to benefit the insiders, but they produce nothing of value for society as a whole. They are merely parasites.