Here you go...
I have absolutely ZERO understanding of what you say, toknormal
Here's a quick 101 for you Tante.
There are (broadly speaking) 2 types of money in the fiat system:
[1] - base money
[2] - credit money
Base money is brought into existence by a central bank which issues a certain amount of, lets day, 'dollars'. Credit money is brought into existence when a commercial bank borrows base money from the 'Fed' and lends it out to commercial customers at an interest rate greater than the base rate (thats how they make money).
Clearly, the amount of credit money in existence depends on how active the economy is because people borrow more when there's a lot of activity to finance new projects. (Think of it as the economy 'pulling' the pink bubble out the way). Note that interest continuously accrues on all the credit money in existence (even if the base rate is zero as it almost is now under ZIRP conditions) so an outer 'debt' ring will form around that big pink bubble.
The size of the pink bubble relative to the blue centre grows according to the fractional reserve ratio. i.e. commercial banks have to keep around 8% of "blue stuff" in relation to all the "pink stuff" they lend out. If the economy doesn't grow fast enough, central banks try to grow the size of the BLUE CIRCLE and reduce the base rate in the hope that it will make it easier for the pink bubble to grow and catch up with the "interest debt ring'. (A process known as 'quantitative easing', QE). Clearly this requires co-operation from the economy itself otherwise it is (as many have remarked) like "pushing on a piece of string".
The distance between the outer edge of the solid pink bubble and the 'interest debt ring' represents the minimum amount the economy must grow to cover the interest on the ongoing credit money supply. Central banks are usually under instructions from their respective governments to keep inflation at 2% (Note: there is retail price inflation and there is monetary inflation - the size of the pink bubble - which may not be the same thing).
PROBLEMS
Hopefully, you can now see straight away what the dangers are and what must be avoided at all costs:
[1] - DEFLATION. Because if the pink bubble shrinks, there isn't enough credit money in existence to cover all the interest liabilities in existence and DEFAULTS will occur. (Referring to the diagram, the pink circle won't grow enough reach the outer 'interest debt ring' in a year). This affects CONFIDENCE which underpins the whole house of cards and must not be compromised at any cost (hence tha bailouts)
[2] - HYPER INFLATION of the pink bubble. Because that destroys the value of credit money and causes the size of the "interest debt ring" to run away - same result as above but through a different route.
WHY JAPAN, US, EUROPE AND CHINA ARE ALL DIFFERENT
JAPAN: is headed for HYPER INFLATION because they keep expanding the monetary base (blue circle) but the pink bubble isn't getting any bigger and the economy is stagnatin.
EUROPE: is currently heading for DEFLATION (in fact as of last week, it is now officially deflating) because the Germans won't let Mario Draghi start expanding the money base as they have adverse memories of carting their wages around in wheelbarrows. Mr Draghi would really like to start European QE though and he's frustrated with the Germans over it. That's why Greece is a headache for everybody because the southern European countries are up to their eyeballs in debt and need a central bank to keep their interest rates low buy buying their bonds. Greece just makes everybody nervous and increases the risk premiums on their debt making things even worse for countries like Spain, Italy and France.
US: The US has completed such an enormous program of QE that they've now expanded the "blue circle" to 4 times its 2008 size but again, without really having much effect on the economy which is why they are not able to raise interest rates otherwise they'll "push" that outer interest debt ring further away out of reach of the pink bubble. QE is still going on but hidden in the form of "carry trades". That's where Japan does all the money printing and banks borrow Yen and buy US treasury bonds with it, pocketing the difference between the yield on their US bonds and the interest on their Japanese loans. (Note that the Bank of Japan announced it's massive increase in QE the day after the US Fed announced the 'end' to their QE. Ergo, QE is still going on but the baton has been passed to the Bank of Japan who have been under the "US thumb" since the end of World War 1).
RUSSIA/CHINA: Here, the exact opposite of what is happening in the West is going on. The Russians and Chinese have been buying gold for the last 4-5 years. Russia's sovereign debt level is tiny compared to the West. This is why a potential catastrophe is on the cards because all the Chinese have to do to break the western banking system is to start putting pressure on western debt. There are a number of ways they can do this - impose a gold standard of their own (they are already well on the way with the new "Brics" banking system), dump their huge holdings of US Treasuries etc. They do not want to do this just yet though because the west is a huge market for them so they're busy developing their own economies so they have more of an internal market and are less reliant on the west. This is what's behind a lot of the tension at East / West flashpoints such as the Ukraine and Turkey.
WHERE DOES CRYPTO COME INTO ALL OF THIS
Crypto, by definition, is UNLEVERED BASE MONEY. That means it belongs in the BLUE CIRCLE in the diagram below. It cannot be destroyed by a banking crash or economic crisis the way credit money can. This is why banks see it as a huge threat right now because in a bank run, crypto is a potential safe haven from a credit crunch. Of course, most people don't yet realise this because crypto just isn't mature enough, but ironically, banks do realise it and are trying to keep a lid on it (see, for example
https://www.cryptocoinsnews.com/sparkasse-bank-blocks-bitcoin-related-bank-transfers ).
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