That means no more landing fairy tale money and pushing interests even to a negative numbers just to keep people borrowing in hope their spending will recover the economy.

We are beating a dead horse.

If we could just let market decide the interests and not money printer, the economy would stop inflate itself. The only money banks could lend would be those that the bank really owns.

> The only money banks could lend would be those that the bank really owns.

while this is sound in theory, the past has shown that if you do it this way, there would be possible run on banks, as well as credit crunches that hurt more than help.

If money is tight, because lots of lenders fear lending out (who would lend money out that they can't guarentee a return of?), then people who really need to borrow would pay dearly for it (and may be not be able to afford to pay). This would hurt, and probably hurt a lot more than the current "inflationary" printing. You just don't see it because the current system is actually good enough, and all you can see are the minor flaws.

If money is tight, interest rates rise. There is always a cost that will persuade someone to risk their money.

These are not minor flaws. We are creating money from nothing which means pereptual inflation which means your savings are no longer safe. It's much more sound to just borrow money, which makes you dependent on the mercy of state regulations.

My interpretation of the current economic situation is that we dodged the great depression because our money supply is more flexible than a gold standard but now confidence tanked and the recovery is massively delayed.

But as we can see the money are flexible in only one direction. You can print more money when times go bad but will you burn it when times are good?

This is like saying we dodged withdrawals by taking more of the drug.

Banks do something useful.

You (and many others) have some money, but you don't need it now.

The bank lends it out and puts it to work. They keep enough to pay people back, assuming there isn't a bank run.

If you banned fractional banking, people would find a new way to invent it.

Yeah people would find another way to invent it. Like MLM pyramid schemes. The issue is the bank doesn't borrow money I have. Banks borrow money I have and money I don't have. Yet who is taking the risk? If something fails government will bail them out with money I no longer have as it was taken from me by taxation long before I deposited it into bank.

But government runs the same scam because they also don't have enough money to lend so they borrow money from another bank, namely FED. This bank also doesn't have the money so they start up the printers and act like government owns them.

The government debt is so high that if you sum up all the debt government owes and add what government promised (social security etc.) you will find out it pays so much in interest that it's basically bankrupt.

Somehow we ended in system where no one has money, everyone owes each other and we all act like it's okay.

We all know this will implode and the longer we wait the worse it will be.

While there are well-known risks of e.g. bank runs, manias, panics and crashes, banking has been around since medieval Florence. I believe it will still be around for a long while.

That debt pays for very important tax cuts for the rich.

Well tax cuts were implemented so lower income people would not lose jobs. For example private jets were made tax deductible so the industry would not burn to dust when thanks to tax increase people stopped buying them.

The private bond market already exists. The Fed mostly messes with treasury yields which can lead to crowding out but that is a different problem.

The issue is that no private market can devaluate currency. Why would you lend money at 5% interest when inflation is expected to be 10%.