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Figure 6 Because of Inflation, Every DM Is Worth Only Pfennigs Economic historian, John L. King, links inflation to the interest paid for the "credit balloon." In a private letter to me, dated January 8, 1988, he states: I have written extensively about interest being the major cause of rising prices now since it is buried in the price of all that we buy, but this idea, though true, is not well accepted. $9 trillion in domestic U.S. debt, at 10% interest, is $900 billion paid in rising prices and this equates to the current 4% rise in prices experts perceive to be inflation. I have always believed the compounding of interest to be an invisible wrecking machine, and it is hard at work right now. So we must get rid of this mindless financial obsession. A 1,000% expansion of private and public debt occurred in the U.S.A. during the last 33 years, the largest share coming from the private sector. But every resource of the Federal Government was utilized to spur this growth: loan guarantees, subsidized mortgage rates, low down-payments, easy terms, tax credits, secondary markets, deposit insurances, etc. The reason for this policy is that the only way to make the consequences of the interest system bearable for the large majority of the population is to create an economic growth which follows the exponential growth rate of money - a vicious circle with an accelerating, spiralling effect. Whether we look at inflation, social equity, or environmental consequences, it would seem sensible from many points of view to replace the "mindless financial obsession" with a more adequate mechanism to keep money in circulation.

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Margit Kennedy (!) - Interest and Inflation Free Money  

Copyright 1995 by Margrit Kennedy) (Published by Seva International; ISBN 0-9643025-0-0; 1 2 LIST OF FIGURES:..................................

Margit Kennedy (!) - Interest and Inflation Free Money  

Copyright 1995 by Margrit Kennedy) (Published by Seva International; ISBN 0-9643025-0-0; 1 2 LIST OF FIGURES:..................................

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