Re:Millennials Are Poorer Than Their Parents, Investigation ...
by dragontamer on Tuesday March 08, 2016 @07:30PM
(#11249953)
Nah man. Just the people who hate on Fractional-reserve banking.
Nothing is wrong with consumers using credit. But when banks use credit (far above and beyond the arbitrary 20% number that the Fed has set), then a failure at one bank can cascade against the rest of the banks in the country.
People have forgotten that the massive decentralization and massive deflation of the 1930s created the conditions of the Great Depression. Tiny banks were far more correlated with each other due to shoddy lending practices.
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People calling for the Gold Standard have forgotten the lessons of the Great Depression. Banning Gold from US Citizens was a major step towards curing the Great Depression: https://en.wikipedia.org/wiki/Executive_Order_6102
Once Gold was no longer in circulation, the Fed was able to expand the money supply by printing more dollars than there was Gold to back it. In the coming years, the US would start pulling itself out of the depression caused by Gold Hoarding and loose fiscal policy.
Honestly, it was a similar strategy as QE or dropping interest rates that was employed in 2008: the goal was to expand the monetary supply to pump us out of a potential Depression.
If anything, its credit that allows us to get out of economic shocks like that. All the Libertarian Gold Bugs seem to forget the lesson of the 1930s however...
Nothing is wrong with consumers using credit. But when banks use credit (far above and beyond the arbitrary 20% number that the Fed has set), then a failure at one bank can cascade against the rest of the banks in the country.
People have forgotten that the massive decentralization and massive deflation of the 1930s created the conditions of the Great Depression. Tiny banks were far more correlated with each other due to shoddy lending practices.
-------------
People calling for the Gold Standard have forgotten the lessons of the Great Depression. Banning Gold from US Citizens was a major step towards curing the Great Depression: https://en.wikipedia.org/wiki/Executive_Order_6102
Once Gold was no longer in circulation, the Fed was able to expand the money supply by printing more dollars than there was Gold to back it. In the coming years, the US would start pulling itself out of the depression caused by Gold Hoarding and loose fiscal policy.
Honestly, it was a similar strategy as QE or dropping interest rates that was employed in 2008: the goal was to expand the monetary supply to pump us out of a potential Depression.
If anything, its credit that allows us to get out of economic shocks like that. All the Libertarian Gold Bugs seem to forget the lesson of the 1930s however...