"I'd like to understand this better. There's two villages. A businessman from village B comes to village A and buys a store from Bob for 100$. Bob keeps the mon

"I'd like to understand this better. There's two villages. A businessman from village B comes to village A and buys a store from Bob for 100$. Bob keeps the money for a rainy day. Where is debt increasing?" I am not going to rehash the (excellent) answers you have already received, but it's worth summarizing: The debt increase occurs because of banking, and specifically, fractional reserve banking. Your instinct is correct - if Bob just puts the money in his desk drawer, no new debt is created. When we say that your scenario ipso facto creates debt, what we really mean is that it creates debt because of course you immediately deposit the funds in a bank.