A way in which we can conceptualise the banking system is by imagining 100 people all being given $100 and as a result of this they are expected to pay back $110 at the end of the month. The only way in which you can earn extra money is by earning it from someone else in this group of 100.
So there is $10000 in circulation, but $11000 needs to be paid back. In the best of situations this would mean 10 people would end up with nothing and go bankrupt, and the other 90 would be able to continue the cycle. But in our current system it does not work in this way as there is such inequality. Continue reading How The Financial System Is Being Used To Disempower Us