Debt Rattle June 30 2014: Bad Debt Drives Out Good Money


Home Forums The Automatic Earth Forum Debt Rattle June 30 2014: Bad Debt Drives Out Good Money

Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
  • #13780

    DPC Fisher schooners at ‘T’ wharf, Boston 1904 A principle commonly known as Gresham’s law, though it can be dated as far back as Biblical times, not
    [See the full post at: Debt Rattle June 30 2014: Bad Debt Drives Out Good Money]


    A new class of people has been created by our system.

    I don’t know what label to use.

    They will borrow money forever.
    They do not fear the debt collectors.
    They know that the debt collectors will not come to take what they have bought and consumed.
    The debt collector does not exist.

    The old saying was, “You cannot get blood out of a stone.”


    What might have happened if banks were allowed to fail?

    I think that bad behaviour on the part of banks is due to the lack of consequences. I am not sure that I subscribe to free market ideals, but it seems to me that even if all the banks failed at once then others with money would have found a way to lend and prevent a long term liquidity crisis. It’s the management of the system by governments and other agencies which prevents the removal of the bad actors and the finding of a new equilibrium without them. I’m sure current banks could be outcompeted on a level field.

    All the free market advocates I have heard of are not really for a free market at all, they supports the current status, which is far from free. Rules are partisan and knowledge is kept obscure.

    I don’t think I am a free market supporter because I think that free market capitalism will scrape all life off the planet in it’s collective quest for growth. In any case, free markets don’t really exist, and the more you try to support them, the LESS they exist! I suddenly see it!



    IMO free marketeers are scared of the unpredictability of the real world. they seek to install a theoretical engine of self-regulation so that they can predict the outcome, they then try to peturb the machine to their advantage, which totally misses the point of self-regulation. Twice.


Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.

Sorry, the comment form is closed at this time.