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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: loantech who wrote (2438)11/29/2005 11:32:39 AM
From: E. Charters  Read Replies (1) of 78419
 
Whew! I was worried there for a while, but now that I know people we can trust are in charge I's going back to sleep.

As long as there is an interest rate there will be inflation. As long as there is an interest rate it will be impossible to pay back all loans. The reason is the money to pay back the interest is never specifically created by any instrument (the bank does not give you all the money to pay the loan back, just the loan money)* and from the consumer at the retail level it manifests itself as inflationary wage increases.

* Just think of this. If the largest capital group is business in terms of loans, then all that created money has to go to paying into the economy ALL the money that is paid to all sectors, as that constitutes the primary wage, profit, capex, tax and dividend money that should support the economy. So on top of that capital amount, where does the money come from that pays the interest on that loan amount? Foreign exchange? Believe it or not, the US gov't in 1801 had no personal tax and little business tax. It got all its money from excise on imported goods! And it was in surplus with regard to cash! Of course the system is much improved now. Now we are in debt and leaking cash to foreigners.

EC<:-}
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