We know that the banking system creates money from nothing, doing nothing, and there is no wealth in that. That money in the form of a loan represents the wealth that will be created by those to who money is given.
This mechanism has particularly perverse consequences and is really heavy for the entire economic and financial system.

We know that we need a sum of money given accordingly to the level of trade of economic society. Only practice can say how much and the correctness of this amount of money.
Excess liquidity in a system produces inflation, or a reduction of the capacity to purchase of the money.
Lack of liquidity in the system produces deflation, or an increase of the ability to purchase of the money.

The consequences are understandable intuitively. If people have more money than is necessary to buy all the goods in circulation, these will cost more, because there will be a greater demand for goods, while if the money is less of the total of goods in circulation these will cost less, as will reduce their demand.
It is not that hard and complicated isn’t it?

As long as the money was a product (like gold or silver) to the increased need of money (like gold or silver) other goods were used instead of money.

There was a sort of buffering between goods. In the USA during the time of the great inflation that followed the war of independence, was used tobacco as goods of exchange instead of money.
All excess or lacks of money were supported and compensated automatically by the system… but as I said this was true as long as money was real money as long as money was not just paper but a real good.
The situation has changed radically since the money of paper has replaced the real money, since then the issue of new monetary instruments have been done practically only with the creation of new debt. This creation was delegated by States to the banking system.
In this way not only the banking system is remunerated by means of the rate of interest, but also is able to exercise, through the debt, pressure intolerable in respect of citizens, businesses and even States.

In other words, by means of this mechanism, the debt has become an instrument of mass power, while first was an instrument of individual power.
Probably many of us forget than in ancient times people ended up in prison for debts.
The creditor was entitled to use this power, until the debtor became a slave.
The old fellows were aware that the debt always tends to expand! And therefore, with the passing of time, a growing number of citizens were in trouble.
For this reason periodically measures like the so called ‘Jubilee’ were issued for the remission of debts.

Very rarely happened to a State to have debts usually happened in case of special events or in the need to finance a wars. This meant that private donors were ultimately connected to the destiny of the governments and the nations.