>>19951085>this isn't true b/c they earn interest in the tier 2 commercial banksWrong. If physical cash and coins were debt based, they would be cancelled/destroyed when you used them to service the principal on a bank loan. They don't vanish nor are they cancelled or destroyed when you use them to repay bank loan principal. They go into the bank vault to serve as reserves to cover requests by "depositors" to redeem the money they think they have in the bank, which they think is physical cash and coins or backed by same at a 1:1 ratio. However, those cash withdrawal requests aren't actually withdrawal requests, as the public thinks. They are actually currency exchange requests whereby the public requests the exchange of ex nihilo issued interest bearing debt based fiat currency, which is now digital, for debt free fiat currency (physical cash and coins). The exchange rate is artificially subsidized as there are way, way, way, way more units of digitally created ex nihilo issued interest bearing debt based currency than there are units of debt free physical cash and coins. So instead of paying $1000 digital USD for a $1 USD paper note, which is what you should be paying, you pay $1 digital USD for a $1 USD paper note.
Moreover, when you deposit a $1 USD paper note in a bank, a $1 digital USD is created but the $1 USD paper note is not destroyed in the process.
But when you withdraw a $1 USD paper note from a bank, a $1 digital USD is destroyed in the process.
Likewise, when you use a $1 digital USD to repay bank loan principal, that $1 digital USD is destroyed in the process.
But when you use a $1 USD paper note to repay bank loan principal, that $1 USD paper note is *NOT* destroyed in the process.
