Comment Comment by davidverhasselt To stay in your simplified universe, consider just two entities, A and B. A has all $100K, B has $0.- A loans $100K to B at 10%.- B buys raw materials from A for $100K and creates products X and Y.- A buys product X from B for $60K.- B returns $60K to A.- A buys product Y from B for $60K.- B returns $50K to B.A ends up with $90K and product X and Y. B ends up with $10K. At no step was money created out of thin air. Total supply still $100K.You could simplify it some more by allowing B to pay back A using product X and Y instead of moving $60K around back and forth. parent davidverhasselt 8 years ago
- A loans $100K to B at 10%.
- B buys raw materials from A for $100K and creates products X and Y.
- A buys product X from B for $60K.
- B returns $60K to A.
- A buys product Y from B for $60K.
- B returns $50K to B.
A ends up with $90K and product X and Y. B ends up with $10K. At no step was money created out of thin air. Total supply still $100K.
You could simplify it some more by allowing B to pay back A using product X and Y instead of moving $60K around back and forth.