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100% reserve banking system using government fiat money needs to tax the money back to preserve its value. The current endogenous money banking system needs the principal created to be later extinguished by repayment in order to preserve its value. Either way, money enters circulation as a debt-of-itself usually on a schedule. Once fiat money has been lent and recursively re-lent under a 100% reserve system, it becomes 2 or more principal debts of the same money – excess principal debt just like the current situation.

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