To: 1066AD
We've bastardized capitalism with socialism. That's a problem.
21 posted on
12/06/2006 7:34:12 PM PST by
bannie
To: bannie
In this case, socialism or capitalism isn't the issue. With fiat money and a central bank that "increases liquidity", you get a mirage of prosperity, a mirage that later turns into a recession when the non-performing and under-performing investments have to be paid for.
To cure the recession what does the central bank typically do? It lowers interest rates to make it easier and less expensive for business and individuals to borrow. This only leads to more "mal-investment", which later causes a recession, and so on.
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