The easy way out

Posted Nov 6, 2012 23:07 UTC (Tue) by petrakis (guest, #39672)
In reply to: The easy way out by Cyberax
Parent article: Let’s Limit the Effect of Software Patents, Since We Can’t Eliminate Them (Wired)

I didn't say depressions weren't possible under a metallic currency system. In fact, if you actually took the time to read the document I originally cited you'll find a dissection of many of these depressions and the following conclusion. The frequency and depth of these "depressions" were much lower under a metallic currency then that of a fiat currency. Depressions are "normal", like storms, they come and go, what makes them "economy killers" is the massive use of leverage which is only possible under the arbitrary fractional reserve system e.g. the great depression and the 2008 banking collapse.

The fallacy is that government can actually shield us from a depression actually occurring to begin with. Our currency is based as much on confidence these days as it is on GDP, probably more so.

In closing, I'm not here to win a flame war, I frankly don't care. My goal is to get just *one person* to think twice about business as usual wrt fiat currency and seek the truth for themselves.

The easy way out

Posted Nov 6, 2012 23:41 UTC (Tue) by Cyberax (✭ supporter ✭, #52523) [Link]

So there were depressions before the FRS. That's the fact, it's unarguable.

The pre-FRS banking system was on a verge of a catastrophic collapse, so that's why the NBA had been passed. Saying that NBA destroyed a "fairly successful" banking system is kinda sad.

>Depressions are "normal", like storms, they come and go, what makes them "economy killers" is the massive use of leverage which is only possible under the arbitrary fractional reserve system e.g. the great depression and the 2008 banking collapse.
You might notice again, that 2008 was so destructive exactly because it was caused by a "shadow" banking system. It was not dependent on FRS or fiat currency, it could just as well happen with "hard" money (as pre-FRS crises show us).

The only two things that made it big:
1) Sudden austerity and hard-currency belief among elites.
2) The scale of the modern economy.