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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (768177)	2/12/2014 9:53:19 PM
From: RetiredNow	Read Replies (1) \| Respond to of 1574980

neolib => Why is it the case that the citizens of a modern economy are capable of producing way more than their monetary system would support? Might there not be some other monetary system which could drive their economy at near full potential? These are good questions. The answer to the first is excess leverage and liquidity through central bank meddling enables production to exceed demand precisely because central bank suppression of market interest rates and monetary devaluation distorts pricing and risk signals in the economies of the world. So we get malinvestment. Second question is also good. Yes. Stable money of any kind is far preferable, because it allows free markets, in other words the actions of millions/billions of individuals buying and selling, to set the prices, which drives more efficient allocation of capital to production to meet current demand, with much less waste than when central banks are distorting markets. I'm not a big fan of gold replacing the USD or even gold convertibility, but I would be the first in line to vote for someone who would hamstring the Fed mandate and limit it to one simple command: maintain the stability of the USD. The fact that Bitcoin exists is not a testament to this misguided notion that we've found a viable alternative or solution to the reckless Fed. Rather, Bitcoin is a symptom of the problems we face with this unelected fourth branch of government that makes stealing at least 2% of American wealth through every year a primary policy plank, along with endless creation of bubbles and busts.