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Analogy correction

Here is a better analogy for what banks do: they take a dime from a thousand people, and give it to the person receiving the loan of $100.  The person, of course, does not feel like the money has been stolen, so my analogy with a hold-up is not right.

But inflation saps wealth–even if so subtly that, as Keynes observed, not one man in a thousand can detect it in ordinary circumstances–and it is created, by and large, by the institution of fractional reserve banking.  Inflation happens when the economy is good because the banks are lending.  We have relatively low inflation now because they are NOT lending.  Simple.

Obviously, they create the money more or less from scratch, which doesn’t sap the wealth of anyone, UNTIL it circulates.

Once you learn to grasp what banks do, and how large the gap is between what SHOULD have happened, and what DID happen, it’s a bit like dropping into “They live“.