[tibanne]

Governments allows banks to create new money in the money supply when they make a loan. Banks live to make these type of loans. It's basically no work for them and a lot of free interest money once they have them secured.

One socially accepted area of taking a massive loan is in housing. People seem strangely ok to work as a slave for the banks so that they can live in a box. This pushes up the prices of housing and at the same time inflates the money supply.

If we removed their ability to create new money, house prices would come down and people instead of banks could make an income from their own capital in peer to peer lending.