This is a ridiculous claim and only exists in a fantasyland. Markets are created by successes and failures. The science of determining beforehand that something will not be a failure is not yet here and when it arrives Im going to the casino.
you’re kidding me. No trace of that at all.
time IS money, (effort is time) and the resources your refer to are either money or they themselves cost money. So nothing gets done without first having or borrowing.
So the hoarding/saving we have been talking about is a now a bad idea? It seems that you think its OK to loan money if you are pretty certain there is no risk and you have screened the borrower. But if the borrower is determined to spend “time” inventing something or buy tools “resources” to invent something or invest in R&D you will not offer funding because that would not be a “good loan” aka risk.
Saving is a good idea and rewarded with a deflating currency, but so is loaning money. With a deflating currency you should get lower interest rates being offered than an inflating currency in normal functioning markets because the lenders don’t need to offset their loss of value on the principle.
Please explain how the scenario is unsustainable.
The current debt based currency with fractional reserve banking requires inflation of the monetary base via expanding debt. This is the scenario that is unsustainable!
The system requires more debt creation to service existing debts. Eventually the amount of debt required to service the existing debts cannot be created and the system will collapse. The game is nearing the end currently and the evidence is the sustained low interest rates(some even negative)! These rates are artificially driven, and with interest rates below inflation rates in many cases causes large amounts of speculative investment.
It will be interesting to see how much more debt the central banks can create and whether it will be enough to sustain the speculative investments the commercial banks are supporting. Consumers seem to be about tapped, outside of the top 1%. Governments will need to step up their debt levels to keep things going I believe.
What you quoted isn’t even an argument - it is a statement of fact.
Making stuff which people do not want, returning no profits, results in losses. This is economics 101 and frankly, I find it odd that you are rearing up over it.
The point isn’t that credit is evil or that savings should always be used. The point is that people (most of which aren’t investors) shouldn’t be driven to take risks, just to escape inflation.
It is not a fact. How do you know for a fact that you are creating goods or services that people don’t want unless you create them first and introduce those goods or services to the market.
I’m not talking about knowingly building a boat with holes in the hull
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The point is that people (most of which aren’t investors) shouldn’t be driven to take risks, just to escape inflation.
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And those same people who don’t want to take risk rely on others to create jobs and economic stability or send them welfare payments and pay their local police force to protect them from the boogeyman.
I made no assertion about anyone knowingly doing one thing or another. That is pretty much the point. If you knew it would be successful, credit would always be repaid, but of course it is not.
This is why I used this statement to support my argument that spending savings can only result in a loss of what you already have, rather than what you hoped to have.
Let’s not use straw men; having no inflation doesn’t stop people taking risks (or using credit) and as you well know, they do not do it through altruistic motivations. Driven people are not content with just retaining their wealth - they will endeavour to increase it.
However, it does allow the average person to retain their wealth without having to constantly shift it to assets/investments, which they may be ill equipped to evaluate.