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by msellout
3699 days ago
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Lending does not necessarily encourage spending. During the housing price collapse crisis, the US government lent money to banks at a cheap rate, expecting to spur more consumer lending. Instead the banks just kept the money under the mattress, so to speak. |
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And we're back to the old spending vs saving & investment view of economic growth. I'm squarely in the Austrian camp on this, so I don't really care about spending, especially if it's fueled by government intervention to "spur aggregate demand".
I disagree that you have to have inflation, especially when we talking about gold & bitcoin. The past 100 years of economics has been tuned to a fiat money + fractional reserve banking + debt + inflation paradigm. Considering bitcoin within this framework doesn't even make sense, as it will (probably) not be the currency of a whole economy.
Also, there is more to the story concerning the Fed's balance sheet [1] and the link to inflation.
[1] file:///C:/Users/Clark/Downloads/market-outlook-2014-03-why-the-feds-4-trillion-balance-sheet-isnt-creating-inflation.pdf