>We’ve had one deflationary depression since the Federal Reserve was started, and we used to have one every 20 years before the Fed. That was the Great Depression. And it was caused by a young fed tightening money because they thought they needed to emulate the gold standard. Well they did and they brought around a deflationary depression big time.
Depressions are and always have been debt bubbles. They’re a byproduct of loans with interest and they were first recorded by the Sumerians 3000+ years ago. Incidentally the Sumerians also invented interest on loans and solved the debt bubble problem by having periodic debt jubilees, something that we implemented on a per person basis with bankruptcy.
The cause of the great depression was a huge debt bubble states and federal governments failed to allow the bad debts to be written off until 1946.
Want to avoid depressions? Don’t have loans with interest. Want to break out of our current Japanese style depression? Force the bad debt to be defaulted on quickly to reset the system.
No interest means no loans. No loans means little innovation.
You might as well go back to the barter system. But today’s doctor is going to require a few truck loads of chickens.
No interest means no loans. No loans means little innovation.
You might as well go back to the barter system. But today’s doctor is going to require a few truck loads of chickens.