Here’s an important concept that no one will actually read.
The world contains $36.8 trillion of actual physical money, yet global debt now exceeds $184 trillion. For most people this is an abstract concept, as how can there be 5x more money owed, than money that exists?
This is due to something called fractional reserve banking. For every physical dollar that a bank holds in it’s vault, it’s allowed to lend out a larger multiple of imaginary dollars. The result is that our credit cards (and other digital means of payment) are not actually based on real money, nor are they backed by real money.
Banks then charge interest on this fake money, thus generating more money for themselves, while creating more debt for the people. It’s a compounding debt cycle that grows at an ever increasing rate. Each time the cycle repeats, the ratio of debt to real world money increases.
We’re now at the point where if you were to take the combined debt of all world governments, corporations, and people, and divided it out based on the world population, it works out to $86,000 per person. This is a truly abhorrent statistic, that represents what is arguably the greatest scam in human history.
The truth is that our global monetary system wasn’t built to be sustainable, but rather to be profitable. The powers that be get rich from charging interest on money that doesn’t exist, while the people incur absurd amounts of debt.
The longer this continues, the greater the repercussions. Eventually the economy begins to collapse, and more money is then printed to stabilize and prop it back up. This is a short term fix, as the worse the situation gets, the more inflation is required to maintain it. The problem inevitably compounds itself, growing worse with each repeating cycle.
Sooner or later the current monetary system will collapse entirely. It’s not a question of if, but when. These cycles are getting closer and closer together, and many countries such as Venezuela, Angola, Egypt, Argentina, Nigeria, Yemen, Congo, etc, are either already facing hyperinflation, or on the verge of it. The problem is now even spreading to world leaders, such as the USA, China, and Japan, as we are currently on the verge of another world recession.
A complete paradigm shift is required to end this fiasco. This is why cryptocurrencies such as Bitcoin have been created. They are transparent, decentralized, deflationary digital currencies. Although a joke to the general public due to misconceptions and price manipulation, there is significantly more to these digital currencies than most people realize. Granted Bitcoin likely isn’t the answer to stopping the world debt crisis, however the technological innovations being made in the cryptocurrency field will undoubtedly contribute to whatever replaces the current system.