… then won’t a recession result when private agents increase the money supply, too? Say there’s a gold standard in place; gold is money, and the supply of gold is the money supply. If there’s random year to year fluctuations in gold production, or superior capitalist production allows an ever incre…

Same thing goes. You ain’t going to walk around the mall with a bag full of nuggets.

Gold would be the money. The amount of gold used as currency would be the money supply.

That’s fine. But the coiners and minters would not necessarily be the miners and producers. It would still have to be purchased and made into currency before use as currency. Whether it be direct metal exchange or notes directly tied to the metal.

OK, I had a hard time even expressing it in my head, and I might not have it figured properly. Keep thinking on it, just in case.

[image] Business cycles under a gold standard? Economics Questions I’m sure this question has already been debated to death around here, but I used the search option and couldn’t find a thread on this particular question, so I’ll start a new one. Could an infl…

Private banks can create the Business Cycle through fractional reserve lending. When banks lend a fraction of a deposit they title two individuals to the same deposit: The depositor and a borrower. The borrower really gets money that that the depositor has withdraw rights to. This process takes plac…

Increases and decreases in the money supply are not - in themselves - the problem. Low interest rates are not necessarily a problem, either. After all, the demand for cash balances as well as the supply of and demand for loanable funds all fluctuate over time. As HabbaBabba is (I think) trying to s…

Be sure to understand that monetary expansion does not cause recessions per se. Monetary expansion causes lower interest rates, which cause widespread malinvestments. At some point the monetary expansion must stop (lest the currency be devalued so far as to cause hyperinflation, which ends with the …

The lower interest rates misrepresent time preferences. Its the misrepresentation that causes the cluster of errors. If a miner stumbled upon like 100 tons of gold and stores in bank on savings account, would this still cause booms and busts?

If recessions are caused by expansion of the money supply...

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katokato September 18, 2012, 10:16pm 10

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If recessions are caused by expansion of the money supply...

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