Up Only Goon

The book is an interesting critique on the way the system works too. I had Word translate a passage from the book for you as an example: Read more if you're interested. Suppose a soft drink manufacturer wants to build a new filling department. For this, he takes out a loan from the bank. Normally a bank lends the money that savers have deposited, but let's assume that the bank is a bit tight, because there are many loans outstanding. That is why they contact the central bank, which is allowed to provide loans without the need for deposited money. He can conjure up this money out of thin air, as it were, and in this way bring new money into play. This way, each bank can get extra money, of course also in the form of a loan, so at a collateral and a specially set interest rate, namely the discount rate. The central bank determines the level of this discount rate. If the central bank thinks that more loans are being taken out than is good for the economy, it increases the discount rate, making loans more expensive and therefore less interesting. Conversely, by lowering the discount rate, he can make loans cheaper and therefore more attractive to investors. The discount rate is therefore a kind of steering mechanism for the economy. Sounds good, right? Yet it is the greatest madness. Millions of bankers learn that and love it, but if you think about it more closely, you'll discover that this is exactly where the construction flaw lies. Let's see what happens. Suppose the central bank provides a loan out of thin air, amounting to 100 million dollars. For example, the discount rate is three percent. That means that (with an assumed term of one year, which we will assume for convenience with all examples) 103 million dollars will be repaid. But where are those extra three million dollars supposed to come from? After all, they do not exist at all! And there is also no possibility of getting that extra three million dollars, because only the central bank is allowed to create money and in return it wants to have interest again, and so on! What madness! Yes, of course, there is more money in circulation, and with this money the interest is paid ok in practice, but with the result that this money is simply missing in another place. And where money is lacking, money must be borrowed again in the hope that you can repay it later. The financial system is a vast system in which much is distributed, settled, becomes effective with some delay, but one thing does not happen: nothing is lost, not one meagre dollar. After all, it comes down to the fact that – someday and after a hundred turns – another loan is taken out with the central bank to pay the interest for the first loan. If the economy were a human being, we would say he is addicted. Now it comes. Because the central bank charges interest for newly created money, more debt is created than there is money. That is the flaw in the system. Isn't that what we're seeing happening? The economy is growing and growing, but miraculously, everywhere more and more has to be saved, there are fewer jobs, everyone has to work harder, has less time for themselves and their families, taxes go up, everyone feels that things are getting worse and worse, while everyone is doing their best to make it better.