Comment: US Money backed by Labor of the working man

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US Money backed by Labor of the working man

US Money is not just printed and dumped into circulation. If it were, it would have been in hyper inflation mode long ago.

New fiat money is loaned to banks from the fed, not handed out (ok, its handed out, but its "on loan ... to be paid back")

Banks don't give that money to people, they give them loans that are expected to be paid back.

So, basically every dollar that goes into circulation is on SOMEONE's back. Some honest, working american who gets a paycheck and pays their bills every month will be paying that money back to the bank.

So, even tho our money isn't backed by a commodity that has been saved, it is backed by some poor schmuck who intends to pay it back through hard labor of one kind or another.

You will have crazy hyper-inflation as more and more people declare bankruptcy, or walk away from their mortgages, or whatever, because then, all the money spent on the system by consumer loan spending is no longer backed by that person's good word (ongoing labor), which will upset the balance between production and money supply.