Banks charge people to use currency. The higher they charge, the more expensive it is to do business, the higher the prices. If it gets too expensive to do business, business slows down.

People don't realize banks charge them to use currency. This is essentially what inflation is, a percent fee to use dollars per year.

I mean, for example, if I want to sell you an apple, and we agree on using dollars, then I will want to charge you for the apple plus all costs and profits.
If dollars are costing 3.6% per year, or whatever inflation government lies about this year, then I will want to charge 3.6% higher to make up for it. So I will charge you the apple plus 3.6% currency costs, plus say 5% other operating costs, plus 5% profit. People do this intuitively.

But unfortunately then consumers try to blame 'greedy business owners' who 'overcharge' them. This is what happened in Weimar hyperinflation. Everyone blamed farmers for 'taking advantage of everyone' and charging so high for food, when in actuality they were charging for the cost to use currency, which was in the 100's% per year. All people had to do was use a cheaper currency.

This is why Bernanke says gold is not money, because it's a cheaper currency. Gold would ruin Federal Reserve's monopoly, which allows them to charge so high anyway.

There ought to be a way to ignore people on these forums.

No, it doesn't look to me like you're missing anything. I would say, maybe, loans would be made on large projects where return was great, such as energy plants. If the loan was denied, people could more easily save up the capital themselves to invest in a small project. This could encourage more small businesses, innovation and competition if people don't have to take out credit to start a business. There would probably be fewer people buying lattes on credit.

Business owners wouldn't get tricked by the ready availability of credit into misallocating resources on long-term projects like housing where there wasn't genuine demand represented by savings. So by the time all the people who should have gone into science got done building the houses out of the material that should have gone to say, solar panels, there would actually be people with money to buy the houses, instead of now where everyone is bankrupt, had no savings to begin with, or no longer has credit. Jesus Huerta de Soto explains this well: http://www.youtube.com/watch?v=uF9RG3hyBZU

From my understanding, people in government steal everyone else's money (they call this taxing, borrowing, and inflation), and when they have stolen too much, they go to war to steal some more, to distract others from their theft, and to use the war as an excuse to print. When this doesn't work, they just keep going until people realize what's going on.

Well if people have lost faith in the currency, then they all rush out at once to dump the dollar and buy products while they still can. The sharp rise in demand causes a sharp rise in prices. If the dollar is no longer money, then for all intents and purposes and perfect or not, all the products become money, until a new money is established.

Usually the government prints dollars chasing these prices, and it's never enough, so they print more. This also conveniently as mentioned keeps credibility while paying off government debt. But if people in government wanted to handle their debt right, they would have done it already. So there would be no expectation that they would stop printing until they thought they had blamed enough, stolen enough, made others suffer enough, fooled enough, or more likely got bored enough to try another fiat scam.

Well it would depend on how well I knew you. It didn't say if you and I are strangers. If I knew you needed an operation that cost $4,990 and we were friends then this deal would be considered a windfall and I'd agree to it.

If you and I are strangers, then considering we know nothing about each other, I would say no because all else being equal, why should we get unequal amounts?

This reminded me of an article on why psychopathy still exists in the world and how to reduce it. Basically it comes down to it making sense in game theory unless mitigated by reputation. Psychopaths get away with stuff by papering their reputation and smearing others'. If people don't reduce the psychopath's reputation, they will get away with anything.

In this case I wouldn't want to give myself the reputation of accepting less than half with strangers, in case I needed more in the future, unless I was very secure knowing that I wouldn't ever need more. Also I wouldn't want to give the stranger the sense that they can take more than half with strangers, because maybe my friend or family member in need will be in the same transaction in the future? If this person has a bad reputation then absolutely we will neither get any money. If this person has a great reputation then I would assume they possibly made a more well-informed decision, an error or were joking, and we could come to a mutually satisfying understanding after the deal. (See why it's important to reduce a psychopath's reputation? If they don't have a reduced reputation they will get away with anything. Also they smear others' reputations to leave less for others and more for themselves.) If we're strangers maybe this person is a psychopath or has a bad reputation that I don't know about and I wouldn't want to reward them. Beside all this it's basically a chance for each to gather information of the part and whole.

Renminbi might be the next reserve currency. People in China are making it easier to transact in what same say is a move toward making it an international currency. Setting up dual currency credit cards and bank branches in other countries. Two branches in the US in New York and California. Jim Rogers predicts the renminbi will eventually be freely convertible.

Please, please conduct your business in a controlled inflationary currency so that I can purchase your troubled assets with my sound currency when you have a liquidity crisis. I love me a good sale.

Competing currencies for the win.