Gold standard and interest rate?

In case of gold standard and limited emission, where will a borrower get money to pay interest? Assume a bank have issued 100 billions of anarchodollars. It lends the money to various entrepreneurs at the rate 3%. In a year they must return 103 billions. But where will they get the extra 3 billions? The money they owe to the bank have never been issued. Indeed, some of them will run their business successfully, earn money and pay their loans. But the rest entrepreneurs are condemned to bankrupt. The bank will confiscate their property. This way the bank will get more and more property every year and in far future its going to own everything. Also libertarian ethics requires personal responsibility of the individual without the cover of a legal entity. It also assumes the debtor must compensate the losses by forced labor. Doesn’t it lead in far future to the situation where all people become slaves of the bank?

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I'm hopeful someone more knowledgeable will step in with sources and further reading to back up their claims, but I can address your questions briefly. You're making two assumptions that are inaccurate. For one, inflation will occur as a general rule as gold is produced. The benefit of a "gold standard" over any other form of money is that the rate of increase in the money supply is very consistent and cannot be adjusted. Even under a gold standard, the money supply would not be static. The other assumption you make is that value is a zero-sum game. On the contrary, exchange makes everyone wealthier. We aren't fighting over slices of the lie; rather the entire pie is getting larger. Further, I'm not sure which aspect of libertarian ethics you've read that suggests debtor's prison or the abolishment of bankruptcy. Libertarians are far from reaching consensus on an ideal legal system, but I'd hope that slavery is not a component of any serious libertarian legal framework.
- wareagleben

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