this post was submitted on 08 Dec 2023
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[–] hansl@lemmy.world 4 points 11 months ago (1 children)

If you have a dollar, and lend it to me, and I lend it to my friend Alice, we have 1 dollar, but the total debt is 2$.

Nobody is claiming there are trillions of wealth around. But there are trillions worth of debts. Because countries, companies and people lend to each others a lot.

How’s that absurd?

[–] ininewcrow@lemmy.ca 2 points 11 months ago

Then Larry asks for $2 and that indebted $2 becomes $4 for Larry who now lends it to Steve who can now say he has $4 but now there is $8 worth of debt ... all from $1 along a long chain of people promising to pay things back, even though they have can't.

Multiply that by trillions and now we have a long line of debt that is impossible to ever repay and the only way to maintain the system is to keep making promises to more people and institutions that it will be repaid back. An article I read about this scenario years ago estimated that if all global debt was halted today, no more loans were made and everyone and every institution was told to start paying back everything at a minimum amount ... it would take millions of years to completely pay off everything.

Nobody likes it being said and everyone claims it isn't so but in other circles ... it's called a Ponzi scheme ... where a scam artist takes your money and promises to make it grow by promising it to other people in an every longer chain of people with ever increasing amounts of money ... the only way to stop it is to uncover the scheme and force everyone to accept the corrupt absurdity of it all

If we all took a step back and lost faith in the financial and banking world .... all of it would come crashing down. It isn't a system built on wealth and money ... it's a system of faith .. and as long as keep believing in it ... it keeps working.