JohnAl

In This Economic Crisis, We Are All to Blame

(Permission to revise and extend my remarks?)

Human nature is what is it is. We want stuff now. Human nature and fiat money are not a good fit. Fiat money makes it too easy to have stuff now and pay for it later. Long periods of excessive growth in the supply of fiat money and credit also raises asset prices and fools us into making mistakes like thinking that housing and stock prices will always go up. This makes it even easier for us to justify having now and paying for it later.

That's where the bubbles come from. That's the recipe for these crises. There's only one fix - sound money - but too few want to do it.

Even sound money doesn't bring a perfect economic world. There's still human nature.

In This Economic Crisis, We Are All to Blame

The scourge of fiat money is what is responsible for this economic crisis.

Where the credit bubbles came to exist differed in different areas, even within individual countries, and some bubbles were built for nefarious reasons as well, but the bubbles don't even come to exist without fiat money.

And if the various governments and central banks are able to patch up this mess and reflate (which is not a given yet, in my book), then we'll see this again in short order. The particulars of the story will change, but the same thing will continue to happen until we have sound money again.