da banks force da companies to raise more money coz their fincial position is no good
then da companies get their friends da fund managers to to buy their shares using da retirees money which is invested with them its a win win for everybody but da retirees

da summarry is dat da retirees are left with a pile of worthless shares andf da banks win again….wake in fright my friends coz da whole fing is one giant ponzi scheme known as babylon

The system is designed to go from booms to busts. If you were sitting down from scratch to design a system that is inherently unstable and essentially random in its outputs you would come up with the current financial system.

It is unstable because to increase the money supply a bank (or someone) must make a loan. To make a loan you need an asset against which to guarantee the loan so the more assets you have the more loans can be made to you. Thus the more your assets increase in notional value the more loans you have. Now once your assets start to drop in value the fewer loans you can have and this will in turn reduce the value of your assets which in turn will reduce the number of loans you can have.

Thus we increase loans when asset prices increase and this in turn increases the money supply. This is called positive feedback and we all know that such systems are essentially random in behaviour because when we decrease loans we decrease asset prices which reduces the money supply. How far up the money supply goes and how far down it goes is unpredictable. It is one of those systems where we have the “butterfly effect” where small events have big consequences.

A simple solution to the problem is to remove the link between money supply and loans. Let us increase the money supply without increasing loans and the problem will be solved - provided we do something sensible with the increased money supply. One sensible thing is to use the extra money to build renewable energy plants which immediately become profitable if they are built with zero interest capital that only needs to be paid back when the plants make a profit. This will not be the end of capitalism as we know it but it will enable the banks to do what everyone things they now do. That is, take deposits and lend them out. That is what banks are good at. They are not an appropriate mechanism to increase the total supply of money as history has repeatedly shown.

Islamic banking does this and that would be a way of fixing the problem.