The other side of that equation is too big to fail is holy fuck. Think about what would have happened if the two days of zero cash flow across the globe in 2008 were to actually bankrupt everyone back then? Literally, every single country on the planet, every single person, every single company and every single government has borrowed from the future to invest in present infrastructure. Everyone is betting the future will see higher human populations that at some point in time will stop borrowing to pay off the old debt in discounted (inflated) currency. A part of the inflationary trick is the realization that humanity will always be borrowing from its future self to pay its current self. It works because of the psychological trick that humans believe that tomorrow will always be better so they keep on working. And, as long as they keep on paying off the debt a bit at a time, over a long enough period of time old debt gets paid off in inflated currency (or am I mixing up the inflated /deflated currency label?). Anyway, the $1 borrowed 100 years ago gets paid off as $1 + bit in future currency that is worth less, making the old loan to dead people worth less. It's a kind of ponzy scheme that actually does "sorta" work, as long as the psychological trick of everyone believing tomorrow will always be sunny works. Now, the whole if everything went broke has a few ways we can look at it: 1) We if everyone went bankrupt in 2008, none of the physical assets would have disappeared. If everyone got to keep their physical assets on paper we could have wiped out all debt, wiping out a whole bunch of people for sure, but we would have forced a re-alignment between real world assets and it's ownership and started from zero. However, in just a few years we would have just rebuilt the debt anyway back to what it was. ... or .... 2) We could keep on printing money and keeping everyone afloat and everything kind of flowing and pushing the debt on to the central banks. Don't forget, that when a private bank "loans" money from the "fed" they have a debt to the fed. The other side of that coin is that the "fed" might have a debt it can call, but that is also a liability on the fed side of things. What is really nice about the fed "loaning" money to "private banks" and the banks PRETENDING they have a "debt" and the fed PRETENDING they hold a loan demand is that the fed has no enforcement power to take over anything anywhere. Not only that, the fed has an infinite ability to print money and zero actual liabilities, by which I mean there is NO ONE that can call any of the feds obligations because it doesn't borrow money it just prints money. It's funny money, the fed is just a black box that we pretend has value when it kind of acts as a rubber band that has just enough slack / pull to keep things going while it absorbs bad debts. I am probably missing a big piece of the puzzle here, but, as far as I can tell, the fed holding gazillions in debt obligations to private banks means nothing as it prints money, cannot borrow from anyone and cannot owe anyone anything. The big problem is that we are in right now is that the HUGE amounts of cheap dollars are allowing people to bid up the prices of real-estate because private companies are allowed to speculate on realestate + foreigners are allowed to buy land in the states pushing up the pricing. Basically, the whole worlds sees american real-estate as the only real way to save the value of their crumbling economies so they are dumping money into real american assets like real-estate. And we have communists running our government and feckless do nothing republicunts that are too afraid of their shadows to do anything to fight the communists. I am not saying anything is looking good and I'm not saying fiat is better than gold. I don't know what is better. I'm just pointing out that the monopoloy money blackbox that we call the fed is kind of an ingenious mechanism that wipes out debt through inflation. I mean, ostensibly, I believe the Amish have it 100% correct. They live fully within their means and owe no one nothing but their own to the extent they can manage. I don't know if I pine for that kind of life, but I do pine for that kind of responsibility. I just don't know how long it would have taken us to invent all of this technology if we couldn't pretend to "borrow from the future" to "gamble on our current infrastructure gambles" that are actually underwritten "by the expectation that the future will have more children than in the past to pay off those debts".