Posted on 01/28/2007 7:08:14 PM PST by hubbubhubbub
Yes, and the pool is the size of all its deposits. Therefore, it cannot loan out more than it has on deposits and thus does not "create" money.
Deflation is a good thing in real life. Nobody quits spending money. If you need/want something this week you will pay this week's price. Perhaps you missed the Industrial Revolution and more recently the Personal Computer Revolution in your history class.
No, deflation is considered far worse in any economist' mind, and I agree with them. Cascading business failures, massive layoffs, farmers destroying crops because they can't get anything for them, the populace reduced to bartering and subsistence level soup-lines are considered by most to be a bad thing. See: Great Depression 1929-1942 for a good background on this.
Yeah, that's why Japan had 15 years of recession/crappy economic growth since 1989, because the deflation they suffered from didn't cause anyone to stop spending. LOL!
Keep talking, I like pointing out your mistakes.
"the deflation they suffered from didn't cause anyone to stop spending"
Thanks for reinforcing my point, clown.
I think you're confusing government created shortages (thru taxation and regulation) with actual deflation.
Government created shortages would cause prices to rise. Clown.
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