The system was designed to collapse, ever since 1913 (the fed reserve).
Central bank fiat has no other end destination.
It's mathematically impossible for any other result.
The trick is in how much of real assets (anything tangible) can be transferred from people, to the wealthy few - before the crash happens...
But it will happen , it has to.
There is no other option.
This has nothing to do with free market capitalism..
I am not entirely sure about that. While the system works like a ponzi scheme the difference is that there is a lender of last resort, which translate to a machine that can print money at will that can feed the ponzi scheme. This is different to you and me if we were to start a ponzi, we would need dollars or bitcoin or some form of currency we don't control or cannot just create.
For instance the FED can rescue any loan it wants, simply by buying it up, using freshly printed money. As a result the system can be develeveraged without collapsing if the FED wants to. This would lead to extreme unfair wealth distribution, which may cause political issues but technically this is the only ponzi i know of that does not need to collapse.
Money is issued ( with interest) by the fed.
That then needs to be repaid .
There is never enough money to repay the debt because the interest part of the money has never been printed.
The fed can buy debt, thus it can always feed the pyramid. Thats the difference. So i think because of this texhnically it does not need to collapse.
What am i missing?
It has to collapse.
With further increased printing of money it becomes worth less and less each year..
...eventually the money will become worthless - people will not buy government bonds. Countries will stop buying it or using it (see the current transition away from the petro dollar over the last few years - and the US invasion of iraq and libya? - both governments stated they were coming of the petro dollar and using other currency).
When those dollars come back to the US - bang!.
You can keep printing until it has no value - as it what must happen when you charge interest on money that doesn't exist..
Interest on money loaned, doesn't exist.
How can you ever pay it back - if it doesn't actually exist?
Hence the fed res ponzi scheme set up in 1913 (jekyll island).
I t was designed to collapse - coming off the gold standard in the early 70's put off the inevitable, as the bail out of the banks on 2007/8
It has been put off for so long as possible - to try and transfer more real assets to the rich - but the end will happen - as sure as the sun coming up tomorrow.
The near identical thing happened in Rome all that time ago - they started putting less and less silver (printing more money) in their coins as social welfare systems - and the military - had to be paid for...
Eventually people walked away from Roman currency,...and the rest is history, as they say...
Yes i agree mostly, but the fed can also reduce money by increasing interest rates. That would lead to many defaults which would collapse the whole system. But the fed can then buy up bad debt from institutions it wants to survive and thus allow parts of the system to collapse while keeping it alive. As such i think it does have to collapse technically.
This would of course lead to other issues.