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Ammar Bilajac

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If the interest is increaseing the money supply, which is decreasing the value of money, where will it end??

With more and more credit, more and more people have to give money for credit.
But the one who lend you 100 $ wants that you give him 110$, where does that 10 $ come from?

Topics: economy interest
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    Krisztián Pintér 200+

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    TED Translator
    Oct 3 2012: if. but it is not. interest rate has nothing to do with increasing money supply.

    in you example, the answer is strikingly and painfully obvious: my earnings. i need to give up that much consumption, and work that much more.
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      Ammar Bilajac

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      Oct 3 2012: when banks lend money they increase the money that is circulating, its called the scondary emission of money...
      I am sorry my english isnt that good...
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        Krisztián Pintér 200+

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        Oct 3 2012: when banks lend more money than the deposits they have. but that is not related to interest rate. that money multiplication would happen if there were no interest rate. this is related to fractional reserve.

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