" To understand why each Greek owes €30,000 in debt requires an understanding of the role of credit in the capitalist system. Fractional reserve banking allows banks to lend more money than they actually have. In boom times everything looks rosy to the capitalists and credit is extended and profit rates look healthy. But this expansion of credit fuels overproduction. It then starts to dawn that debt-saturation means not all loans will be repaid. Banks become reluctant to lend to one another and credit dries up. This is a credit crunch. As capitalists retreat to cash, effective demand in the market reduces and a recession occurs."
The above is a short extract from an interesting and informative article in that excellent paper and website, THE COMMUNE. Take a peek and grasp a firm understanding of how and why we are being screwed by the wealthy, the name of the game is capitalism.
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