I have demonstrated, in the this model (and further demonstrated in the models in the appendix), the mechanics by which a bank (or banks) make money loans and collect money interest without increasing the base quantity of money. It seems, however, that a large number of people insist that the quantity of money must increase continually to pay interest on money loans. These models demonstrate, but do not prove, economic concepts that these people seem to have overlooked.

What economic concepts have they overlooked?

The hypothesis of expanding money overlooks very important economic concepts regarding:

• The Purpose of Economic Activity
• The Nature and Role of Money
• The Role of Money Prices
• The Economic Function of Lending
• The Function of Interest