Economic Futurosophy

[Cutlass]

So now it causes inflation and deflation.

It always could. When the economy is "good", it chokes off growth and causes deflation and depression because there is not enough of it to go around. And then when the economy is crushed and crashed there is too much of it for the situation and inflation results.

Gold forces and endless cycle of boom and bust.

 

[SS-18 ICBM]

Without fractional reserve banking, there will be an increased demand for money, so investing saved money elsewhere will be highly lucrative.

That brings us to amadeus' point earlier: how can you continue capital expenditure required for economic growth if interest rates are high? Seems like that would constrict the production of goods which, coupled with the constant increase in the money supply, would lead to runaway inflation.

Gold forces and endless cycle of boom and bust.

That doesn't sound too different from what we have now.

 

[Cutlass]

That doesn't sound too different from what we have now.

The difference now is that most of affects can be negated or moderated through active policy and regulation. The current mess exists because regulation was removed from the mix of policies. But once deregulation allowed the crisis to develop, monetary expansion prevented the crisis from causing a Great Depression.

 

[Terxpahseyton]

That brings us to amadeus' point earlier: how can you continue capital expenditure required for economic growth if interest rates are high? Seems like that would constrict the production of goods which, coupled with the constant increase in the money supply, would lead to runaway inflation.

To me it seems the whole point of this suggestion is that loans and their interests are not that relevant anymore, because loaning would by replaced by investing.
After all - there is a whole lot of cash coming in and looking for a use. Just from the bottom, not the top.
Of course, the question is, how would that system of investing proceed? Because if it doesn't, the whole idea would surely be a disaster, that seems clear.