Central currency is loaned into existence, at interest. More simply,a person who wants to start a business borrows $100,000 from the bank, with the requirement that he pay back, say, $200,000 over the next ten years. He has a decade to double his money. Where does the additional $100,000 come from? Ultimately, from other people and businesses who are in the same position, spending money that they have borrowed. Even the wages that workers receive to buy things with were borrowed somewhere up the chain.
But this seems to suggest a zero-sum game. Each borrower must win some other borrower’s money in order to pay back the bank. If the bank has loaned out $100,000 to ten different businesses, then at least half of them have to fail. Unless, of course, someone simply borrows more money from the bank, by proposing an additional business or expansion.
Therein lies the beauty and horror of interest-bearing currency. Interest is expansionary. As long as the economy is growing, everything works out. […] Running a business and growing a business end up meaning the same thing. Even if one business pays back everything it owes, this only puts some other business into debt. As the debtor seeks to expand to meet its interest requirements, the debtor either takes territory from an existing business or finds a new territory. Standing still is to lose.