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10 sats \ 3 replies \ @Satosora 2 Nov \ parent \ on: Central banks need escape route from cycle of boom and bust econ
If we stop bailing them out, wont they lose even more public credibility?
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51 sats \ 0 replies \ @Rothbardian_fanatic 2 Nov
The only way they had credibility was with FDIC. Get rid of the FDIC and the banks will have to behave themselves or go bankrupt. They won’t, theoretically, lend much more than they have taken in as deposits. They won’t be backed by the Fed, they won’t be naked short on commodities. That would cure many, many problems.
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10 sats \ 1 reply \ @drlh 2 Nov
Malinvestment drives the economy.
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0 sats \ 0 replies \ @Rothbardian_fanatic 2 Nov
Malinvestment drives the economy into the ground. Malinvestment arises due to economic miscalculation because of “unnatural” interest rates. The natural interest rate is the rate that demand for and supply of money balance. That would be savings and loans. With the Fed arbitrarily deciding the interest rates, nobody can do proper economic calculation for investments.
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