niphtrique schreef op 10 februari 2015 11:22:
Negatieve rentes zouden wel eens een blijvertje kunnen worden, want positieve rentes zijn op de lange termijn onhoudbaar, wat het volgende simplistische voorbeeld illustreert.
Our current monetary system has a feature that causes trouble. Most of the money we currently use is created by banks as a debt on which interest must be paid. This may seem a rather uninteresting circumstance, but it has far reaching implications. Economic theory tends to mystify this, so I will simplify matters and take a limited perspective. Assume that there is a small self-sufficient village that does not trade with other villages. This village only needs € 1,000 to operate its entire economy. The local bank is happy to lend the € 1,000 at a reasonable interest rate of 5%.
What happens? After a year the € 1,000 has to be returned, but also a petty € 50 in interest must be paid. There is a slight difficulty, a fly in the ointment so to say. The required € 1,050 simply is not there as there is only € 1,000 to begin with. Then the bank comes up with a clever solution. The economy needs € 1,000 to operate and the € 50 is non-existent money that cannot be repaid, so the bank offers to lend the villagers € 1,050 at the same reasonable interest rate of 5%.
It is now clear what will take place next. At the end of the next year the debt has grown to € 1,102,50. This may not seem much but it cannot be repaid as there is only € 1,000. After 10 years the debt has grown to € 1,628,89. After 100 years it amounts to the considerable sum of € 131,501,26. There is no way of repaying this debt as there is still only € 1,000 in the economy. Long before that time, the debt level may already have become a cause of some concern, at least by people that can make proper use of a pocket calculator.
If the villagers are quite dexterous with their pocket calculators and fear the consequences of compounding interest, then nobody in the village may be willing to borrow the extra € 50 in the first year. Then there would be only € 950 in the economy in the second year, while the debt remains € 1000. After two years there would be just € 900 in the economy as another € 50 in interest had to be paid. Because there is less money available, the economy could enter into a crisis. After twenty years, there is no money left at all, only € 1000 of debt. Long before that the economy would have collapsed.
blog.naturalmoney.org/150207.html