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1 year agoBecause it allows banks to lend out money they don’t have and when the banks lobby hard enough to completely remove whats left of the gold standard, the sky’s the limit for lending out money. Creating money out of thin air increases inflation. However, in a weird way it impoverishes the lower classes while inriching the elite class because the latter tends to better connected and therefor closer to the “monetary spigot”. This allows the elite class to buy up everything(land, companies, lobby/bribe governments)from the top down like a game of pacman.
No, fractional reserve banking demands endless growth because debts can’t be paid off with interest since the extra money to pay the interest didn’t initially exist. Therefore, banks have to lend out more money they don’t have so the prior debts can be paid off but in the process they create more debt. But those following loans come with more interest which leads to the insatiable need for more growth in the economy by loaning more money.