We use a leveraged system based on hard currency. 100 bucks gets deposited, 10 bucks is held in the vault and 90 is loaned out to people and business. The 90 bucks get deposited and you now have 190 bucks.
Depending on your country, digital money to currency is 30 times leveraged. You deposit 100 bucks in cash and after leverage it reads as 3,000 bucks. This is why shit unfolds so quickly because it's all leveraged and as that leverage unwinds the digital money actually vanishes.
Go back a looong time ago Where you have a hard currency. You deposit 100 bucks. They vault it all and charge a fee. It's still only have 100 bucks. To create more money they had to mine it and smelt it, ie printing money.
Does that help a bit?
Kinda. Seems like fast & loose bookkeeping tho. Whether you leverage 1.9x or 30x (presumably 30 is the integrity limit where you can reasonably expect repayment? Otherwise why not 50x or a million times leverage?), isn't there still a -90 or -3000 on the system's books? So no money got conjured, on aggregate.
That aside, if there's $3000 moving around the economy as a function of the $100 deposit, and there isn't enough actual money to repay the $3000 (and this iterates such that conjured money repays loans on conjured money etc) wouldn't the value of money ultimately be buoyed since its supply is sparse compared to the demand of debt? Instead of a gold standard you've got a debt standard? You and Lizz seem to be saying there's too much debt resulting from the fractional leverage, and the house of cards will topple, but seems like epic says there's not enough debt to offset the devaluation resulting from handing out covid checks?
Anyway, how do the covid payouts relate to a debt leveraged system? Seems like if they physically print money to back each check then the dollar devalues, but if it's deemed to be electronic dollars then it's in the debt column. Is it the case that the economy is backed into a corner where it can't increase debt (the debt exhaustion you mentioned) and it can't afford to weaken its currency?
These are a fool's questions, clearly. If the answer is "just go to the library, man" then fair enough.
Oh, and cui bono? Are the covid checks basically another robbery perpetrated by wall st? My foil hat says they have a harvest about every ten years. Devalue currency, everyone's $100 becomes worth $20, some other investment vehicle inflates in relation to the devaluation, and they ultimately pocket our $80 and adjourn to the private island? Nobody knows they got robbed because they're still holding a Benjamin, even though it won't buy jack shit anymore.