Is fractional reserve banking inflationary?

Discussion in 'Economics & Trade' started by kazenatsu, May 3, 2018.

  1. james M

    james M Banned

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    wrong, why buy anything today if prices are falling and will be lower tomorrow!! Deflation=depression
     
  2. james M

    james M Banned

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    you would anticipate inflation and deflation incorrectly making your business inefficient thus it is far better to anticipate correctly that inflation and deflation will be 0
     
    Last edited: May 11, 2018
  3. squidward

    squidward Well-Known Member

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    Deflation is only a bad thing in a debt fueled economy where debt servicing costs grow exponentially, destroying capital, destroying true price discovery, destabilizing the economy and triggering large market crashes and deflation

    This is a problem of a debt based economy, not deflation
     
  4. squidward

    squidward Well-Known Member

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    The natural cycle deeply exacerbated by a debt based economy
     
  5. james M

    james M Banned

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    deflation=depression. there is no incentive to buy anything when prices are falling
     
  6. james M

    james M Banned

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    what natural cycle??
     
  7. squidward

    squidward Well-Known Member

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    Because nobody has a crystal ball.
    Like gas, food and healthcare?
     
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  8. james M

    james M Banned

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    yes you put off buying as much as you can during deflation causing a depression
     
  9. squidward

    squidward Well-Known Member

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    Unless you match production and consumption perfectly, which is impossible, there will always be oscillations.
     
    Last edited: May 11, 2018
  10. squidward

    squidward Well-Known Member

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    Traders maybe, but even they can't predict bottoms. Rising trends end because some traders bail and some begin to short the market, the converse is true of declining markets. If everyone behaved as you claim, there would never be trend reversals. Every falling trend would go to zero and every rising trend would go to infinity. This did not happen before a central bank and it would not happen if the FED ceased to exist
     
  11. Longshot

    Longshot Well-Known Member

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    The fact that people buy technology today that they know will be cheaper next year sort of refutes this statement.
     
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  12. james M

    james M Banned

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    obviously you need to buy some things today to survive regardless of what the price will be tomorrow but you do not need to buy all things today.
    Certainly adding deflation to the reasons for not buying Technologywhich would help create a depression
     
  13. james M

    james M Banned

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    with tens of thousands of products on the market from all over the world production and consumption are being adjusted on a minute by minute basis in a capitalist economy so there are no supply demand mismatches. When the mismatches occur as far more likely to be caused by government intervention than by the international free market which adjusts on a moment to moment basis
     
  14. james M

    james M Banned

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    if it’s a trend that means it’s noticeable. If it’s noticeable deflation it will discourage not encouraged buying
     
  15. Longshot

    Longshot Well-Known Member

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    Capitalism is self-adjusting. It adjusts to changes in prices.

    I oppose libcommiesocialist attempts to manipulate capitalism.
     
    Last edited: May 12, 2018
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  16. james M

    james M Banned

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    yes it adjusts to deflation with depression since there is no reason to buy.
     
    Last edited: May 12, 2018
  17. james M

    james M Banned

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    there is far far less capitalism during a depression.
     
  18. squidward

    squidward Well-Known Member

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    in reaction to too much buying, but the trends end, as they always do, returning price discovery and purging malinvestment.
     
  19. squidward

    squidward Well-Known Member

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    no, capitalism is doing what it's supposed to, purging malinvestment
     
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  20. squidward

    squidward Well-Known Member

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    and deflation is an adjustment to the inflation that preceded it, restoring honest price discovery and purging mfalinvestment caused by credit expansion.
     
  21. squidward

    squidward Well-Known Member

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    WTF ? your'e serious?
     
  22. Longshot

    Longshot Well-Known Member

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    So then you're not really a proponent of capitalism, as you claim to be. Got it.
     
  23. squidward

    squidward Well-Known Member

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    Yeah, no kidding.
    Capitalist when you're winning, big government nanny state backstop when you screw up.
    Sounds like he was trained by Jamie Dimon
     
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  24. Longshot

    Longshot Well-Known Member

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    Lol, yeah. Fake capitalist.
     
  25. squidward

    squidward Well-Known Member

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    Seriously, the fifth plank of the communist manefesto is the savior of capitalism, preventing those deadly recessions that wipe out the results of the fake capitalists' business screw ups
     
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