Quote from: kjj on October 05, 2011, 09:33:13 PM

Quote from: Iseree22 on October 05, 2011, 03:19:49 PM

Yea I agree with most of this. But there are two types of money, Credit Money( the money you talk about) and 'State' money. Simply, Credit money is derived from 'State' money, and to pay interest on 'credit monies' there must be an ever expanding supply of 'State' money. When I say 'State' money, that could also mean Gold, or other similar token type.

See the bold part. What makes you think this?

One physical paper dollar bill would be sufficient to extinguish all debts (credit money), if it was busy enough.

Equation of Exchange

MV = PQ,

Money Supply = MV. So when I say money supply I mean this quantity.