This crisis has an exit

from the Asia Times:




This crisis has an exit
By Ellen Brown


Countries everywhere are facing debt crises today, precipitated by the credit collapse of 2008. Public services are being slashed and public assets are being sold off, in a futile attempt to balance budgets that can't be balanced because the money supply itself has shrunk. Governments usually get the blame for excessive spending, but governments did not initiate the crisis. The collapse was in the banking system, and in the credit that it is responsible for creating and sustaining.

Contrary to popular belief, most of our money today is not created by governments. It is created by private banks as loans. The private system of money creation has grown so powerful over the centuries that it has come to dominate governments globally. The system, however, contains the seeds of its own destruction. The source of its power is also a fatal design flaw.

The flaw is that banks advance "bank credit" that must be paid back with interest, continually requiring more money to be repaid than was created as loans; the only way to get additional money from the private banking system is to take out yet more loans, at interest. The system is, in effect, a pyramid scheme. When the banks run out of borrowers to support the pyramid, it must collapse; and we are nearing that point today. ................(more)

The complete piece is at: http://www.atimes.com/atimes/Global_Economy/MF07Dj02.html

It's really easy to get bogged down in the myriad, messy details...

This lays it all out very clearly.

Recommended.

Yes, the fractional reserve banking system is based in debt at interest, but as long as the economic growth rate more or less matches the inherent growth of the monetary system, then it all works out.

When economic growth stalls (as it must, in system built upon finite physical resources) then we have what we have now.