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Apr 25 2011
Banks create money by making loans. Author and money expert Thomas Greco uses simple analogies to explain how this process works. He also explains how Direct Credit Clearing offers a simple, legal, and effective means for eliminating the need for bank-derived debt using the 'credit commons' approach.
Greco explains how the debt-based money system (within which we unconsciously operate) creates an inevitable cycle of boom-and-bust, because interest payments on debt, in aggregate, inevitably outstrip the value of goods and services.
The resulting urgency to repay debt creates some of the catastrophes of our time: unsustainable usage of resources, overharvesting trees, mining to much, too fast, building houses too often - all to pay-off not only legitimate costs, but also illegitimate bank fees that do nothing productive in the economy.