Monetary Gravity: A Leash in Space

The next challenge with debt-based money is directly linked to the use of calendar time as a foundational element of money creation instruments, but it goes one step further. All debt instruments used by central and commercial banks require the repayment of principal and interest to the original source, the creator of money. In the case of central banks, their credit facilities and purchased bonds must continuously pay interest and principal. That is what makes them eligible instruments for monetary policy purposes. The same applies to commercial banks. Making loans and creating deposits is built on the reliability of the borrower and the repayment of principal and interest. These obligations to repay are defined by calendar time intervals.