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With bank lending, the effect is temporary, as the loan is paid back, and money destroyed then.
That is the cincher. I believe Chris recently posted alink to a film makign the following claims:
  • money is created by loaning and destroyed by repayment
  • therefore: no debt => no money
  • but, in addition, in order to repay the loan with interest, more money needs to be in circulation at any given time than existed previously, or failing that a fraction of the loans need to be defaulted on
  • therefore, the total amount of debt must continually increase, or there must be a continual stream of defaults in your "steady state"


Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Fri May 11th, 2007 at 08:27:56 AM EST
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