Where does money come from?
Banks create money out of people's promises to pay back loans. This is important; I should clarify. By making loans, banks conjure into existence money that did not exist before the loan was signed. I know. It's a headscratcher. There's a 47 minute video explaining this called 'Money as Debt'. Google for it. It's worth a look, and explains the fundamentals of our money system. Be concerned. It's a house of cards.
The card table really gets shaking when banks lend money out as principal but expect principal plus interest back. The interest has to come from somewhere, and there literally isn't enough money in the world to pay off all the outstanding loans with interest. On the whole, the system is mathematically committed to failure.
The interest breaks the system. Why? In a finite world, exponential curves (the 'hockey stick' graphs that go way up on the right) cannot go up forever, no matter how many economists tell you otherwise. Any solution that isn't ultimately doomed requires steady-state, not growth economics. Exponential growth, whether population, stock market, or interest on money, is a form of cancer, but it's so ingrained in our culture that it's difficult to question. It must be questioned.
We've made it this far because when governments or citizens take on debt it increases the money supply. This postpones financial collapse because of the time lag between when the money is borrowed (i.e. conjured into existence) and when that debt comes due. That's one reason government is so eager to get the credit flowing again. Unfortunately it will just crash that much harder later — hopefully when someone else is in office. It would be better not to set it up to fail in the first place.
So what can you do? Stay out of debt if you can help it. Debt is slavery. Establish some sort of interest-free local currency. It probably won't take off immediately, but it will prepare us for when the money system siezes up. Zimbabwe dollars anyone? Some sort of system to enable trade will be important when money as we know it ceases to be useful.
Stop shaking the table. It's time to put the cards away.