Inflation is a scary thing

Inflation is a scary thing.

In most countries in the world, central banks lend out money, which they create out of thin air, with the promise that they will get the money back “with interest”. Where does the interest come from?
If an economy has 100 dollars in it, and the central bank wants back 101 dollars on its loan, the extra dollar has to come from somewhere, which now makes all of the dollars in the economy worth only 99% of their value.

This starts off small, but eventually, as more and more loans are made at interest, the value of the individual dollars decreases to the point where, suddenly, it costs 100 dollars just to buy one loaf of bread.

What's my point? I think that charging interest on loans is wrong. I think that, if a body wants to make an investment in another group, it should instead expect repayment of the loaned amount, without interest. If the lending group is actually a business that seeks to make money off of its loan, then that lender should negotiate for a reasonable portion of the profits made by the business that is lent the money. We can grow economies without the need for interest. More importantly, we can grow communities without the need for interest.

Now, I realize that interest isn't the only thing that causes inflation. A lack of a particular resource causes its unit price to rise (supply and demand, yadda yadda). While to me, this is acceptable for certain items (rare jewelry, one-of-a-kind collectable items), I don't think it needs to be the case for commodities that form the backbone of an economy. Unfortunately, with fossil fuels running not only our actual engines, but our economic ones as well, we're in a bad situation.

How do we stop the price of oil from rising? I don't think we can stop the price of black oil from rising, because there is a limited supply of it. What I think that we can do is instead produce our own equivalent. Cyanobacteria (algae) can suck up all that harmful excess carbon dioxide that our cars and our industries produce, and use it to grow themselves. We can in turn extract the oil from this algae, and use it to run our cars and our industries.

Theoretically, if input of carbon is equal to output of carbon, this should mean that carbon levels in our atmosphere should remain relatively stable, barring any other unexpected side effects (that I won't get into in this post).

Also, if we can replace the amount of oil we are using with an equal amount of oil grown from algae, we should begin to see price stabilization of commodities that are produced from oil.

Now, energy is the other factor that I wanted to talk about. If we not only stabilize oil prices, but stabilize the cost of our electrical energy production, through gradual shutdown and replacement of non-renewable power sources with renewables, we should be able to drive the base cost of energy down to a level that is relatively stable, and affordable for all people. If we are able to do this, then that eliminates a major reason for price increases needing to happen in the first place.

If the raw cost of production is stabilized, then basic needs costs should also stabilize. And what does that mean for workers? It means that you don't need a wage increase to keep up with the rising cost of food and other essentials that you need to live.
If you can live comfortably on a given wage, then that means there is less initial motivation to want to have more, more, more – which seems to be the current basis for a capitalist economy.

I am an advocate of a steady state economy – one that still uses the principles of capitalism, but realizes that you can only grow so far on a planet with limited resources. Our population can also only grow so far if we expect everyone to be able to have a minimum standard of living that is what we would consider respectable and dignified.

We in North America and Western Europe have it great compared to other nations who are trying to emulate us. Sadly, for the rest of the world to have a standard of living that we do, we would need the resources of at least 5 planet Earths. I hope we, as the human race, can reduce that resource need, or find alternative ways to get there.