Theoretically, if there were only $10 in the world and 10 people. Only $1 of that would exist in physical money. The rest is just debt. Or money that somebody owes somebody else. So spread that $1 among 10 people, and each person has 10 cents. The other 90 cents each person owns, is owed to them by one of the other ten people. It’s just a figure on their bank statement. The currency to back this computerised money does not exist. This video about MONEY CREATION explains how this works.
What happens if one of them ten people decide not to pay up? There would be less money to go around. The $1 in existence will take longer to make a full circle. Eventually, one of these ten people might get annoyed and try keep more for themselves so their wealth isn’t affected. When this happens, somebody else has to go without. Eventually, one person has it all, and most are going without.
This is the cruel truth. 10% of the population control 90% of the world’s wealth. 90% of the world’s wealth isn’t real money. The 10% of money being controlled is 100% of the money that actually exists. Really, we don’t really own any money. If we are lucky, collectively, we might control 1% of the world’s theoretical bank balance.
If you would like to know in more detail, read on. Continue reading “The greatest lie ever told, Economics”