We are discussing Principle and Interest effect here and you are saying charge interest or not doesn't change anything?
It is the whole difference, the interest you do not charged is actually charged in real world and once your described cycle is done, there is unsettled obligations that need another round borrowing to go on. And borrowing going on and on is my point.
Of course it doesn't work like that in the real world. When was the last time you bought clay from a banker?
You said you didn't understand how interest debt could be paid off if the money is never created. I told you how with a silly example, its because interest money doesn't get destroyed like debt money, so the interest debt is repaid by transferring existing debt or actual wealth (which doesn't get destroyed with the loan either). Its completely logical and nothing like the spooky ever growing cartoon debt monster that keeping sublime up at night.
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At no where I say "didn't understand how interest debt could be paid off if the money is never created",
This is what I said: (see bold sentence)
Quote"
Do not understand why you say "interest money is not destroyed when a debt is repaid" that "balance the equation", it looks like exactly the problem, interest money is not created but need to be repaid, so it has to be from the principle from some other debt. (Unless banks spend the interest ahead of the interest repaid, and that is how I see could balance the equation and which itself is awkward, since you spend ahead of getting paid, so bank itself is taking debt, which comes back to creating more debt to satisfying old debt)
. End quote
And you example is exactly doing "banks spend the interest ahead of the interest repaid", and that process itself is creating debt - but you didn't count it as debt. You also creating debt when " banks buy on credit". So in your example, interest is paid by creating new debt, just you didn't charge the new interest in the new debt, and banks spend their interest. (That is why Federal Reserve and US Gov is shouting "spend!spend!spend!" )
The whole P+I>P discussion is because banks do not spend all their interest in non capital behavior but use interest as new principle to earn more to create more "wealth", and that is now sustainable for ever. Probably those online propaganda didn't clearly understand this or omit this statement.
