Best Of

@cohodk said:

@dcarr said:

@cohodk said:

@dcarr said:

@cohodk said:

@dcarr said:

@CRHer700 said:
Inflation is only good for a debtor.

Or an entity that "prints" money at zero cost and for their own benefit.

Because an economy that goes through massive boom and busts cycles benefits everyone...Okey dokey.

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Boom and bust cycles are created by banks (mostly for their benefit), via credit expansion and credit contraction.

There was a massive credit expansion during the "Roaring Twenties". This was brought about via massive cheating on the gold standard by banks and corporations. Then there was the huge credit contraction starting in 1929 (the Great Depression).

The Federal Reserve's track record is abysmal. Central planning of interest rates to foster a "boom" and avert a "bust" only compounds the problems and puts them off for a while, leading to a worse outcome later. It would be better to simply set the short-term interest rate to be equal to the prevailing rate of population growth and leave it at that.

Now we have almost constant credit expansion via inflation.

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Seems like you are saying that for the last 100 years or so things have been pretty good, but you would rather the extreme boom and bust cycle economy pre-1913.

Okey dokey.

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I'm saying that banks make boom & bust cycles worse.

And we didn't need a central bank to have significant and sustainable economic growth and advancement, such as the period from about 1878 to 1913.

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https://en.m.wikipedia.org/wiki/Depression_of_1882–1885

https://en.m.wikipedia.org/wiki/Panic_of_1893

https://en.m.wikipedia.org/wiki/Panic_of_1896

https://en.m.wikipedia.org/wiki/Panic_of_1907

But to your point, yes, all you needed was a railroad system that opened an entire country. Easy peasy.

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We didn't need a central bank or a lot of debt servitude to build a railroad system.

All of those "panics" were caused entirely by over-speculation by the banks.
Nothing really changed in any of those events other than a banking "crisis".
There were no wars, major environmental challenges, fammine, or civil unrest.

So what you are claiming that is that a central bank (the Federal Reserve) is needed to stave off panics by the banks.
If the banks hadn't engaged in malpractice, the banks and the economy would not need rescuing in the first place.

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