That would only be true if my borrowing caused everyone to have to pay more, but in the current system, my borrowing results in only me paying more. The value of the currency hasn't changed at all, I've just placed myself at a disadvantage. IOW, the price of the good hasn't changed at all so their can't be any inflation. My ability to buy as much of it has changed. In fact, that is so true that I could make a logical argument the other way. Interest causes negative inflation. If myself and many others aren't able to afford the interest rates then we won't be able to buy the product. This results in a decrease in quantity demanded and the price drops for everyone. IOW, their currency just became stronger. Anyone who knows a couple things about economics realizes that there is also a flaw in that argument which makes it untrue. In fact, it is untrue to the same extent and for the same reasons that your statement is untrue. That is, interest does not cause inflation either positive or negative. Interest is only the result of people wanting return on their investment to compensate them for opportunity cost.
Still, interest is not ever causing inflation. Inflation is only caused by a proportionately greater amount of currency chasing a lesser amount of goods. Fractional reserve lending causes inflation to a huge degree, but it cannot be argued that the interest on that lending is causing the inflation.
Not everyone loses. Only the borrower loses the amount of interest. Everyone else is completely unaffected by it. The price of the good has not changed. The borrower loses the amount of interest and gains the amount of inflation. The lender gains the amount of interest and loses the amount of inflation. In both people's circumstance, the interest has nothing to do with inflation as inflation is a completely seperate factor in the economy.
It doesn't cause a loss, it simply acts as a medium for exchange. In fact, currency causes a gain by allowing specialization and trade to a much larger degree resulting in the efficiencies you speak of. Paper bills are just paper bills. If someone were to be able to precisely value the goods and services in the world and then print that exact number of bills, and they were then able to only increase or decrease that quantity by the exact amount that the quantity of goods changed, there would never be inflation. The only role of interest in the equation is that it is the method of payment for the service that the bank is selling. It is no different than paying a dentist to drill your tooth. Any interest you pay to the bank is simply money that has changed hands, but it hasn't changed the quantity of bills in the system, and therefore hasn't caused any change in inflation.
Interest causes our money to be worth less because it gains %4 inflation and costs %5 this equals out to the money being worth 1% less on average leading to rising costs for everyone. If someone makes %4 through wheeling and dealing they are taking it from someone else who now has %5 less. This is why half the population is poor.
I'm sorry, but your opinions are flat out wrong. I demonstrated that in the above post. The borrower gains the exact amount of inflation. The lender loses the exact amount of inflation. The 1% difference you speak of is payment to the bank for services rendered. Exactly like paying a neighborhood kid to wash your car. Inflation is not affected by paying the kid to wash your car, and it is also not affected by paying a net 1% interest to the bank. The bank isn't wheeling and dealing. They are providing you the opportunity to make or save more than the cost of the interest. IOW, they are giving you the opportunity to create wealth and charging you some type of premium for that opportunity. 1/2 the people are poor because they don't know how to use that opportunity.
All money comes from a bank on average the difference between interest an inflation is %1. So you gain %4 and lose %5. The difference is how much less the dollar would be worth every year on average. This is mitigated by a trade surplus where you are bringing in more money from outside the countries economic system but if that does not happen then the dollar is worth less. This long term loss is why the country is crumbling right now.
NO!!!! That is absolutely false!! Your lack of math skills is becoming incredibly frustrating. The 1% I lose is axactly offset by a 1% gain of the bank. The money just changes hands, it doesn't change the quantity of money in circulation. Money can be printed by whatever entity people trust to protect against counterfeiting. Interest has nothing to do with the value of that money. How much money is printed is the only thing that determines the value of that money if the quantity of goods stays constant. Allow me to present a situation to demostrate. Their are 10 people on an island making up the entire economic situation on the island. One is a banker who owns a house. Another eight are entrepreneurs who either make goods or provide services, and each of them owns a house, but one of them also owns a second house. The last is an employee of the banker who sleeps in a hammock because he can't afford a house because he only has $50 in the bank, but he knows he'll have saved an extra $100 by the end of the year. The total value of each house is $100. The remainder of the economy is valued precisely at $9000 which includes the value of the services offered by the banker, as well as any currency already on deposit at the bank. So the entire economy is valued at $10,000 and there are 10,000 $1bills printed at the bank. The employee of the banker decides to take a one-year loan from the banker at 5% to buy the extra house for the market value of $100. So from the 10,000 bills in the economy, 100 of them just went to the employee in order to purchase the house, who then gives it to the man with the extra house, who deposits it in the bank. At the end of the year the man pays the banker $105 for the house which has the effect of reducing the man's personal wealth by $105, and increasing the banker's personal wealth by $105. The man who sold the house received $100 for the house, but lost the house and thus has seen no change in wealth. The man who bought the house loses the $105 he paid the bank, but gains the $100 house for a net change of $5 loss to the bank. The banker lost the $100 for the purchase of the house, but was repaid $105 for a net wealth gain of $5. All houses are still only worth the market value of $100. To the buyer, all other goods in the economy just got more expensive because he is $5 poorer. This is the inflation you speak of. This is where your problem is..... It will have the effect of a reduction in demand of all other goods because one of the buyers is now poorer. This will result in sellers dropping the price of goods and making them more affordable. That sucks for them but...... fortunately for them, another citizen just got richer by the same $5. To the banker, everything got equally cheaper in the same amount because he is now $5 richer which causes an increase in demand from him to exactly balance out the reduction in demand on the part of the home buyer. To the other 8 people, prices have not changed because they are neither poorer nor richer and since demand was exactly offset, prices of goods have not changed. The interest simply caused a distribution of wealth. It didn't make goods more expensive, nor did it cause the entire population to become more poor.