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

Economics Economics Questions
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Do what you want. You are just another useless member of society preaching about the evils of people who work.

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That’s pretty harsh. It’s not like I’m planning out a career as a lifelong recipient. I expect to work and pay taxes like everyone else, and I’m okay with that. Public roads are pretty cool. You should drive on them some time.

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Hi als & others,

This is a very interesting question! I’m not an expert in Austrian economics (started reading about it only a few months ago), so the answer that am going to suggest may be wrong or if I’m simply repeating stuff that’s already been said in the previous posts then excuse me :slight_smile:

Ok, now that the introductions are done here is my reply:

I think the problem is not with the increasing money supply but with the way it is brought about. In FRB, banks are creating new money in a “fake” way. What I mean by “fake” is suppose the society has saved up 100 units of money today, banks should only lend 100 units today. But when they issue fake receipts, what they are doing is borrowing money from the future in exchange for an IOU, i.e. issuing lets say 1000 units today hoping that the borrowers will pay back in some years (and hence the term money as debt). And this time travel stuff is never a good idea (if you don’t agree, then I can suggest you some nice scifi literature ;))

In a central bank based banking system, the Govt. and Central bank together are creating this debt money (via govt. bonds).

There is nothing wrong when individuals borrow money today that is saved by another individual today with the promise of paying back in the future with some interest. But it is not right when, say, the individual borrows money by simply creating a fake receipt even legally, I.e. by signing an IOU and even if the bank believes he/she can pay back based on his income today. Now, why is this wrong…because it is very difficult to know how much money we can borrow from the future! This is what banks and central banks are doing now in a FRB-central bank reserves-govt. borrowing-fiat money system on a global level.