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But it has its limits, and as you say it is meeting its limits in the shortage of limitless, cheap energy.
I often muse about what will be owned in future? What will be ownable by any individual person?
Perhaps the very notion of "owning" a million acres of rainforest as personal property will one day be considered outright insanity, on the basis that those million acres are vital machinery in a thousand human lives. It will be considered as crazy as saying you own two percent of those thousand people's noses.
Thank you for spelling out what I was writing in watercolors.
Frames exist within larger frames. Draw a larger frame around your opponent's frame; he will appear wrong or insufficient. This is how wizards play.
Owning a thousand bucks lets the lender loan out ten grand, at interest, and away we go.
no regulated bank can have a ratio anything like 10X. they have to maintain a liquidity reserve and also have assets on the books equal to most of the rest. Ordinary banks cannot print money.
If you hold to the gold bug theory that fractional reserve bank are somehow a fraud on the world, just how would you propose to have a 100% reserve bank work? Just a vault service charging you fees to sit on your gold or other specie for you? There isn't enough gold in the world to replace fiat money with. Barter?
True--it is the Federal Reserve that does the printing. As a bank, all I can do is borrow money from the Fed to loan out on an overpriced McMansion, which would show up as collateral to balance my books (hopelessly overvalued collateral, it is true) and actually, I would be in a tight spot for doing something so insanely stupid, except that I bundle the loan with others like it and sell it to a security company, which will resell it to some (sucker of an) investor, and the money supply is now larger to the amount of one absurdly overpriced box of chip-board and chicken-wire.
Which is what is meant by flooding, and yes it is a form of inflation, far more byzantine but essentially equivalent to firing up the printing presses.
The Fates are kind.
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