If our banks are allowed to create the money supply and use this in a way that drives investors and entrepreneurs, and if this money at the same time is spent into the economy outside the real demand in a market economy, it is going to create an economic state of the market that depends on artificial demand, and thus an artificial price will then follow where this money is first spent into the economy. The housing market is one example.
We will have economic cycles that do not always depend on were the market economy pricing and demand truly is by its own means, and it will not be based on its own regulating mechanisms.
It will instead reflect were the banks believe that their interest on capital management is best served, and this will run an artificial economic upturn in those parts of the economy. But in the end, reality catches up with these artificially inflated economic upturns and we get a recession with less money in circulation instead, because of the banks now reduced ability to lend, but with the cost of the money created as debt by the private sector to the banks, remaining in the economy.
In this way, businesses and individuals are together paying for our banks speculation on the financial markets using our gouvernments main asset having the right to create and spend new money into the economy for its own purposes.
Should not money be spent into our economy to be used for the society as a whole first, and for our common good as a priority, and as payment for real goods and services in the real economy?
This is actually the case when the gouvernment spend money into the economy to be used in the private sector by individuals and business, it constitutes our total asset of paper and coin money, and this supply is regulated by taxes.
We do not want inflation, do we?
So what about bankmoney ..