“Even freezing the monetary base and 100% reserve requirements wouldn’t, by itself, get rid of credit growth.”
If credit grew in pace with demand for money, there will be no business cycles.
“According to Bordo, there’s a -0.24 relationship between short term interest rates … and credit growth.”
See table 3.
“This is the R value.”
The problem with the correlation coefficient is that it tells us nothing about the direction of causation (especially if you use cross-sectional rather than a cross-lagged analysis). This is why empirical work should be supplemented with further explanations. Like I said before, without cheap money, a boom is unsustainable. It is true however that the interest rates are not the whole story, but certainly not for the reasons you think.
“Aren’t financial derivatives and so forth (which played a much greater role in the crisis than any monetary base transactions) some type of inflationary credit in your book?”
Not without inflationary credit.
“I should also note that the only way to completely get rid of credit growth would be to outlaw credit growth through far reaching financial regulations to eliminate all fractional reserve banking and paper currency, abolition of public property in land and application of all rents of land to private purposes, equal liability of all to work, and abolition of all forms of interest and credit.”
You have to prove it.