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What is the mechanism whereby interest is charged on borrowing money, in a system with a relatively fixed money supply? Assume there is $1k in the system. I borrow $100 at 1% interest. Where does the $1 i pay in interest, come from? What if 50% interest? quick answers appreciated. thanks.
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I have been in discussions with friends regarding 100% reserve banking and a commodity standard, and I was asked a question that seems simple but has me stumped. It's best to look at it in the form of a hypothetical situation: A country has a gold standard and practices %100 reserve banking (loan...
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First of all, I would like to introduce myself. I am a computer programmer from the Netherlands. I am working on a theory of money and banking derived from the "Natural Economic Order" of Silvio Gesell. "Natural Economic Order" clearly states that the root the economic and monetary...