Money – The Federal Reserve System

Money – The Federal Reserve System

Our economies have been molded into a debt based system. Have you ever wondered how does new currency gets introduced into the system?

When you take a loan from the bank it is paying you from the money it is holding for the other banking customers right? Wrong!

When you take a loan, the federal reserve prints new money and hands it to you for an interest. For example, if you borrow $100 from the bank it will print new $100 that didn’t exist earlier and hands it to you. You are then supposed to pay back the $100 with some percentage of interest. Thus the banks makes money out of thin air and it gets to keep all the money it prints and more in form of interest.

That is one of the reason why cryptocurrencies are booming. Unlike our regularl currencies which can be printed as much as the banks want, most cryptocurrencies are finite in number making their value ever growing.

We need a better alternative to our current debt based economies or currecy crisis like Zimbabwe might be around the corner. I believe that is what has turned a lot of people interested in cryptocurrencies. It is their finiteness that makes them so valuable unlike our government owned currencies.

Our whole economy has been a mind blow since the 2008 crisis and there have been no signs of any significant improvements, reforms or regulations.