Credit expansion and the trade cycle


Via XX. INTEREST, CREDIT EXPANSION, AND THE TRADE CYCLE – - Mises Institute, which I recommend in full, old advice on our present situation:

The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

See also Kaleidic Economics’ plot of the growth of the money supply over the last decade or so. More of that fresh thinking in economics would not go amiss.

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  1. Austrian economics Mises, Hayek are no help, come to think about it any system that still has USURY or INTEREST %%%%% as part of it will also FAIL also never in history have any precious metal monetary standards either sustained industrial production requiring greater circulations; nor is it possible for them to arrest multiplication of indebtedness by interest. The only currency which we should be considering is mathematically perfected currency‚ As there is one and one only solution to inflation and deflation; to systemic manipulation of the cost or value of money or property; and to inherent, irreversible (and therefore terminal) multiplication of artificial indebtedness by interest… thus it is only by eradicating altogether the latter costs; manipulation of the cost or value of money or property; and inflation or deflation… that is it possible to replicate barter in the form of a truly immutable currency.

    understand this, if inflation and deflation for instance are defined respectively as increases or decreases in circulation per whatever property the circulation is intended to represent, then there is one and one only cycle and lifespan of currency which solves both inflation and deflation – this being to maintain a circulation which at all times is equal to the remaining value of the represented property. The only way to accomplish that likewise is pay off the respective debts at the perceived rate of depreciation or consumption of the property. Thus a £100,000 home [if you can find one] with a 100-year lifespan (figured linearly) costs its debtor ‚ £1,000 per year or‚ £83.33 per month. This obligatory rate of payment not only solves inflation, deflation, and perpetual multiplication of artificial debt by interest (into terminal debt, which is the cause of present failure); it is the only prescription for monetizing our production/wealth which allows us not only to pay for the production of others with no more than whatever we (“free markets”) determine to be a sufficiently equivalent measure of our own production, but to pay for no more than the production we consume, as we consume of it.

    in 1983-4 mike montagne projected that the present pretended economies would engender their own failure at approximately 2010 AD -For your further information visit http://www.perfecteconomy.com