Re:Low interest rates in advanced countries have pushed mone...
by po1nt on Thursday November 25, 2021 @03:20AM
(#29339337)
If money is tight, interest rates rise. There is always a cost that will persuade someone to risk their money.
These are not minor flaws. We are creating money from nothing which means pereptual inflation which means your savings are no longer safe. It's much more sound to just borrow money, which makes you dependent on the mercy of state regulations.
Re:Low interest rates in advanced countries have pushed mone...
by imtringued on Thursday November 25, 2021 @03:16AM
(#29339317)
My interpretation of the current economic situation is that we dodged the great depression because our money supply is more flexible than a gold standard but now confidence tanked and the recovery is massively delayed.
Re:Low interest rates in advanced countries have pushed mone...
by po1nt on Thursday November 25, 2021 @03:22AM
(#29339346)
But as we can see the money are flexible in only one direction. You can print more money when times go bad but will you burn it when times are good?
This is like saying we dodged withdrawals by taking more of the drug.
while this is sound in theory, the past has shown that if you do it this way, there would be possible run on banks, as well as credit crunches that hurt more than help.
If money is tight, because lots of lenders fear lending out (who would lend money out that they can't guarentee a return of?), then people who really need to borrow would pay dearly for it (and may be not be able to afford to pay). This would hurt, and probably hurt a lot more than the current "inflationary" printing. You just don't see it because the current system is actually good enough, and all you can see are the minor flaws.