Subnostr

The fundamental flaw is thinking you can sustainably consume more than you produce, or that you can create real wealth through accounting tricks and money printing.

S!ayer 4mo ago

Well that's the banks and, well they'll blame the consumer's demand for debt.

The banks wouldn't issue debt if there wasn't someone living beyond their means. In America, it's something like $103 000 per person of national debt (not personal). But if you look at the USA development, you can see why it happens.

China? Evergrande a prime example.

Central banks keep the banks in check using interest rates.

The banks issue loans or mortgages to chumps who then blame government when they loose their jobs and can't pay back the debt.

So whose to blame? My finger points to the guy with a five bedroom home, two cars and a boat, a second home etc. all taken out and paid monthly.

Reply to this note

Please Login to reply.

Discussion

Contra 4mo ago

You’re right about personal responsibility. But when central banks make borrowing cheaper than saving for years, they’re rewarding debt and punishing prudence. Both can be true: people should choose better AND the system creates bad incentives. Fix the money, fix the behavior.

S!ayer 4mo ago

Yes, it's done to avoid deflationary or stagnation.

Cheap debt allows for construction and big projects, new housing developments or shopping or transit or infrastructure to be created.

Central banks do only one thing: control the flow of money.

In any case, quantitative easing was only created by Werner in 1990's during the Japanese collapse. That's how "young" the modelling really is

S!ayer 4mo ago

Fix the money by returning to a gold standard. Not the dollar standard.

That will literally solve A Lot, but also change the balance of power substantially. It's why gold is only $3k and growing in line with mining yields and not real demand.

That was changed in 1971 by Nixon, so that was a problem.

In fact, everyone was very happy when the dollar was gold backed. They literally supported it.

Then, to create 'rapid growth' , creating a 'promise' that the dollar would be paid back in America Labour and it's backing rather than gold, allowed the US to grow insanely rapidly from the 70's till now.

Contra 4mo ago

We agree …

Fixed supply money > unlimited printing

Production-based economy > consumption based stimulus

Sound money creates better incentives