I wrote this a while back on the old united diversity wiki as a simple (as in simplified) introduction to how money works today:
How money works today.
How money works today is completely ludicrous.
It pits people against each other and guarantees that the rich get richer while the poor get poorer.
To understand how, imagine there are only 2 friends and a bank, and that in order to buy food, pay their rent, and trade amongst themselves, the 2 friends need money that only the bank can create.
The bank (actually an already wealthy 3rd person) creates £20 and gives £10 to each of the 2 friends.
All the bank asks is that both pay back £11 next year. Since the 2 friends need the money to eat, they agree, gratefully accepting the £10 that helps them to fulfil their immediate needs.
They even promise (because the bank insists that they do) that if they are unable to pay back the £11 next year, they will allow the bank to take some of their belongings as payment.
The problem is, it is totally impossible for both to pay back £11, because the bank only created £20, and 2 x £11 = £22 – more money than actually exists.
The only way either of the 2 friends can pay back the £11 is to get the extra £1 they need off the other.
This leaves their friend with only £9, unable to repay their £11 debt.
The 2 friends are now pitted against each other, both desperately trying to get the extra £1 they need off the other in order to avoid having to hand over some (or all) of their belongings.
Whatever happens, in the end at least one of them is going to lose some of their belongings, and it s the bank (the already rich 3rd person) that is going to get them.
Basically that s how banking works, and that s why bankers (the rich) get richer and the poor get poorer.