I have a very different, MUCH broader definition of money than Black Flag does - his definition is highly semantic, very narrow, and deliberately ridiculing and exclusive of anything that doesn't fit what appears to be his beloved and currently enthroned paper regime.Originally Posted by matt0611
Before I continue, let me be clear on my definition of inflationary, which has NOTHING to do with the disingenuous, intellectually dishonest "general price increases" (an effect with multiple possible causes). When I use the terms inflationary or deflationary, I am referring to the actual supply of what most people count as money, including ALL fiduciary media, that is actively circulating, and therefore "felt" by the economy.
Fractional reserve lending on a loan-by-loan basis is first inflationary (as money is spent into the economy), then deflationary, as the loan is paid off and the interest (which was not created as part of the loan) is siphoned back into the bank. Because credit MUST expand indefinitely for the entire Ponzi system to remain viable, in the aggregate fractional reserve lending is highly and deliberately inflationary -- but also in the aggregate, assuming no infusion of "new money" (the only kind BF counts as money), deflation from all debts paid under our current fractional reserve lending regime would be catastrophic, as there are orders of magnitude more claims on the same base money extant. To satisfy those claims you must a) create more base money (strictly inflationary to the money supply), and/or b) increase the velocity and number of new claims on existing base money (inflationary then deflationary on the whole). And since money in either form cannot be created except as a form of debt, with attendant interest payment requirements, and since exponential expansion of credit is a physical impossibility, the end game is only a question of an equally exponential drop in the value of the money (hyperinflation), with a possible interim - but equally catastrophic - drop in the supply (deflationary depression).
The only question in my mind, using the deaths of stars as a metaphor: Do we just progress into a Red Giant, like our own sun will one day, as an ordinary main sequence star, engulfing everything in its path with its perpetual expansion (hyperinflation), leaving behind a white dwarf? Or, is it larger than a main sequence star economy. Do we, with the help of the Fed and IMF, implode before going full supernova, leaving behind a neutron star, or even a black hole from which nothing escapes?
Either way, the Death Fundamentals for our currency regimes are solidly in place, and they dictate the end game, and that's for a regime of unprecedented magnitude and velocity, the death of which will be positively catastrophic.
Hope that helps.
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