Again, if one accepts the great value of fractional reserve baking in providing, simultaneously, improved living standards and greater opportunity for economic advancement, than one has to accept that significant deflation is harmful and must be avoided just as high inflation rates must be avoided.
No Read "America's great depression" rothbard... The interventionism and money printing only exasperated in prolonged the issue and the Great depression the problem is that assets need to be liquidated to be reprice correctly that doesn't happen when there's a bunch of money floating around all of a sudden
I don't accept this at all. Of course if you flood the market with unlimited funds you tend to create some good things much faster, but precisely at the expense of the inevitable crash. The world worked just fine in 1950. If we stopped at having the internet in 2000, but no cell phones, I'm not sure that humanity would have been suffering that much. Since the venture capitalists gobbled up all the money and had it to throw at lots of projects, of course innovation accelerated, but we will now see the true costs of all this.
In our world there is always room for people with opinions that differ from the mainstream. But of course no one should pay attention to them unless they are backed by sound argument. "Sound Argument" means an argument that is consistent with facts. And by definition there is no such thing as an "alternative fact".
LOL... you want to talk about facts? You think fractional reserve banking is the holy grail. You deem this a fact. I think there are enough experts out there that can trace back the demise of a currency to the very point that fractional reserve banking was created. Facts aren't as black and white and are often used to push a narrative. I hope the FED doubles down on money printing, causes hyper inflation, and puts to bed the idea that money printing is ever good.
I never said that. But now that you have caused me to think bout its virtues and faults I think I am becoming convinced fractional reserve banking just may be the "The Holy Grail" behind the great success of modern banking systems and the economies they serve.
If only the basis of fractional reserve banking could be used for food. Here, eat 10% of a bagel and feel full. Or buy only 10% of a tank of gas and drive for 500 miles! Fractional reserve banking creates a debt based system where those closest to the money printing end up exceedingly wealthy and everyone else becomes a debt slave. I think you're ready for a position in the government with your logic.
a) You have not given proper thought to the alternative; b) You are attributing an inequitable and socially damaging wealth distribution to false causes. The three factors most contributing to inequitable wealth distribution in the United States are: a. the tax structure; b. return on capital > economic growth rate; c. defunding of public education and the acceleration of it's perverse effects via feedback. We have a real example of a world without fractional reserve banking to consider; yet you seem to have given no thought at all to wealth distribution when there was no fractional reserve banking. Fractional reserve banking is actually a valuable force against inequitable distribution of wealth. Perhaps you have spent too much time watching "The creature from Jekyll Island on You Tube. You are young. You know everything that can be known at this point in your life. Give yourself some time. You will know less then.
Suppose a closed system. 100,000 units of paper currency are 'created' and lent out at 10% interest due in 1 year. A year rolls by, time to complete the deal. The Borrower needs to pay the Lender 110,000 units of paper currency. Where do the additional 10,000 units of paper currency come from?