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To: GraceZ who wrote (233898)	12/21/2009 5:21:48 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 306849

>>Interest on the loan can be paid back with savings from production.<< production doesn't create money, so it can't be done that way. if i produce something, i sell it to someone who pays me with money already created. >>It is easy to see what I mean by this by taking money out of the equation altogether and going back to the pre-monetary economy. Imagine you and I are both farmers. We both grow corn. My corn is "in" and yours has yet to yield. I lend you ten ears, tell you to pay me back 11 when your corn comes in. That 11th ear is simply savings from your production. That 11th ear didn't come into being via debt creation, it came into being from your productive efforts, it was created "out of thin air" just as people are always accusing the Fed of doing.<< i don't think your analogy fits. the process that one uses to create marginal money is quite different than a marginal ear of corn. >>We could ratchet up the number of ears we produce (and consequently save if we don't eat them all) every single year without ever creating a single debt between us.<< that works with corn, but it doesn't work with money.

To: GraceZ who wrote (233898)	12/21/2009 5:21:53 PM
From: grusum	Read Replies (1) \| Respond to of 306849

thanks Grace. you made it easy to understand. would you mind answering a question i asked Ahhaha? he didn't give me an answer, may you can.. "is the definition of money confined to what one is personally willing and capable to do? if not.. are interest and dividends considered to be money? they seem to come from what other people are willing and capable to do. if so, then maybe the definition could be "What people are capable and willing to do"? i'd appreciate it if you could help me understand a little better.. thanks