There is a difference between money creation via debt and money creation via printing. We currently create all or the vast majority of the money supply via debt.
Not really. Money is created via credit; debt is simply the other side of that equation.
In the modern age, there really isn’t much difference between cash, credit and debt. Its all just numbers in a computer. However, its much either to destroy debt than cash. Cash hardly ever gets destroyed; not too many people are burning dollars in their furnace (yet). In fact, cash is usually only destroyed when the bill get damaged enough that the banks send them to the treasury to be destroyed (and replaced with new currency).
What happened in Zimbabwe is runaway *physical* printing of their currency. *That* is inflationary. Imagine if the Fed started mailing everyone with a social security number a thousand dollars fresh from the printing press every month. We would see rampant price inflation of basic goods almost immediately and the dollar would decline on the global market.
I think its important to note that there is, however, a significant difference between credit and cash inflation.
You can see the difference being by looking at salaries vs. home and student loans. Things we borrow money to buy increase in price in a credit bubble, due to credit inflation. Housing, education and transportation are a good example. We are paid in cash, not credit and as such salaries have not kept up with the increased price of these goods and services.
This is big difference between now and the 70’s. The 70’s was a cash bubble where everything went up. This is/was a credit bubble.
Oil just plummeted in price and depletion marches on. Sub $70 kills many alternative projects.
If we implemented European mileage standards we would end our dependence on foreign oil overnight.
Energy independence is the kind of thing you can’t wait for the free market to take care if you really want to be ahead of the curve. The market is myopic and will *gladly* kill a consumer today if it means turning a small profit now rather than a big one later. Look at the tobacco industry for an example of this.
Interesting times we live in. Dogmas and ideologies are going to get turned on their head.
Indeed. Our financial system is simply not equipped to deal with the information age. It needs a massive, fundamental overhaul to keep from melting down again.
And I agree with you about over-consumption. As a conservationist it disgusts me. Americans are too fat and over-indulgent. A long recession could do us all some good.
