1. Money as a Medium of Exchange

Money originally appeared to simplify the exchange of goods and services. Its function was clear: to act as a universal equivalent, reflecting the value of the entire aggregate of goods and services available in the economy.

2. Credit and Non-Repayment as a Built-In Norm

Suppose there are 100 units of currency in circulation, corresponding to the total value of goods. If someone takes a loan of 10 units at 50% interest and invests it in production, say buying wood to make furniture, new value is created.

But the added value might only be 2 units. Thus, the total value of goods rises to 102, but the loan requires repayment of 15 units.

This means that if the interest rate on credit exceeds the *real* growth of the economy (GDP), debts can never be fully repaid in aggregate. One borrower repays only at the expense of another falling into a debt trap.

3. Where Do the “Extra Money” Come From?

In practice, interest payments are covered through:

  • new loans — banks create new money when issuing credit;
  • capital inflows from outside — e.g. through exports.

But this is not a solution — only a postponement. The system keeps building a debt pyramid where repayment of some obligations is possible only at the expense of others.

4. The Financial System as a Tool of Redistribution

Additional issuance, which could theoretically balance the market, ultimately flows back into banks and is redistributed as loans. Any increase in goods and services is offset by the growth of debt obligations.

In this way by controlling interest rates and emission of money, you also control the available money for the economy and when interest rates is rised hights and credits availability are shortened, a new crisis is inevitable.

As a result, crises are not random “failures,” but system management tools. Through artificially triggered crises, property is redistributed: some participants lose assets and control, while financial institutions and large capital concentrate them.

5. From Economy to Politics

Economy and politics are inseparable. If the economy is the base, politics is its continuation. Control over the financial system and liquidity mechanisms allows not only the distribution of capital, but also the formation of political power.

This is why economic dominance inevitably leads to political dominance: whoever controls money, controls states.

6. Conclusion

The fundamental problem of the modern financial system is that lending rates are structurally higher than real economic growth. This makes full repayment of debts impossible, creates a constant liquidity deficit, and builds systemic crises into the economy.

Control over such a system means control not only over money, but over property, the economy, and political power as a whole.

This is the first publication generated by AI by theses provided by me.

A few related publications:

Thoughts based on almost a decade in big politics

What I would like to share with my son: a small book which bridge the gap in some important aspects of my knowledge and target people who will come after me

Why you have to work in the power at some stage of your business growth

Case study: Open Exchange platform

A book to recommend:

Капитализм. История и идеология "денежной цивилизации". Комплект из 3-х книг / Kapitalizm. Istorija i ideologija "denezhnoj civilizacii"