Quote by flower411
The last Prime Minister made a lot of noise about stopping "Boom and Bust" policies and yet still promoted "constant economic growth" ....
There appear to be lots of experts on here so can somebody explain how this works ?
As far as I can see there is loads of evidence showing that constant economic growth leads to inevitable bust ....
Can anybody show an economy that has shown constant growth for more than ten years that has been advantageous to the majority of the population living within the influence of that economy ?
flower, i hope that this response is not taken as patronising, too complex or doom and gloom but a truthful answer.
when g.b. said he had brought an end to boom and bust he was knowingly lying through his teeth.
the creation of private credit (new money) at interest is the source of the problem.
if a financial institution can create and lend credit at interest, then it or they must continually continue to do so (exponentially) lest all the credit created would end up back with them eventually by way of interest. this concept you must grasp first in order to understand growth of the money supply (inflation) and increase in all classes of asset values and primarily in property values as this is the "general" route of of new money creation along with government borrowing.
eventually, the lenders must cease new credit creation as the sum total of interest required to service the created money becomes greater than is humanly (aggregate of worldwide production) possible. at this point it becomes obvious to all the lenders that the interest debt and principle cannot possibly be repaid and that each of them who have loans to each other they stop lending to each other as they all believe they have bad loans on their books which they all hide (off balance sheet accounting)
this is very simplified and does not account for derivitives (fraud) or fractional resrve but makes clear the fact that if credit (money) is created in the form of loans (debt) at interest, there must always be boom ((increase in money supply)inflation) and bust ((decrease in money supply)deflation)
unfortunately there will be many critics of this explanation and of me personally on here. people dont like to hear the truth and will always shoot the messenger. hope this helps. regards
