mckontext on Nostr: The current monetary system is a Ponzi scheme. But it’s not a Ponzi scheme in the ...
The current monetary system is a Ponzi scheme.
But it’s not a Ponzi scheme in the sense that it needs more people joining it in order to continue (although a lack of people can be a big problem as demonstrated by China and Japan in real time). What it needs, in order to not collapse, is more units of the currency. Because the vast majority of money in existence today is debt - it’s owed by someone, to someone. What debt has is INTEREST. There always needs to be more new money to pay for the old money.
If the money growth slows down or goes negative (less debt/money is created than is repaid) for an extended period of time, there will simply not be enough money in existence in order to fulfill the claims on the money.
This is why deflation is not only incompatible with the current financial system; it's the biggest threat to it.
But it’s not a Ponzi scheme in the sense that it needs more people joining it in order to continue (although a lack of people can be a big problem as demonstrated by China and Japan in real time). What it needs, in order to not collapse, is more units of the currency. Because the vast majority of money in existence today is debt - it’s owed by someone, to someone. What debt has is INTEREST. There always needs to be more new money to pay for the old money.
If the money growth slows down or goes negative (less debt/money is created than is repaid) for an extended period of time, there will simply not be enough money in existence in order to fulfill the claims on the money.
This is why deflation is not only incompatible with the current financial system; it's the biggest threat to it.