An economy with savings based credit

[Henry Rogue]

No question about it, the history of CD's since 1967 bears that out big time. They would be all the more popular in a sound money economy with banks that are accountable, and have no artificial state-granted default protections, with interest rates that are set by the market, and not a central manipulator with conflicting directives and self-contradictory objectives. Banks really would be competing, not just for your money, but for your promise not to take it from them too fast.

Yes. People save more and spend less during times of high interest rates, thus are more likely to deposit money in CDs.

That's what i've been thinking. Between Bailments and and high risk lending, it seems like something for a person with a good amount of savings and low income (like a retired person) could use.

[W_BRANDON]

Hello folks,

I wanted to know the historical affordability of homes. In our times, there is no way, we can afford homes, cars, holidays without taking a loan.

Also, all those loans are not backed by real savings, thanks to the fractional reserve system.

I was therefore wondering, if we were to have an economy based on credit that is backed by real savings, would we have the same economic growth we have now, and the standard of living we have now.

No. The rate of growth we have is unsustainable. Plus, if big capital purchases (person and business alike) were afforded through savings and not through debt, I believe those assets would drop in price.

The biggest problem with our monetary system is that it is debt based. If we were to liquidate all the debt, there would be no more money. Therefore, in this monetary system, inflation is the only way and deflation is a nasty word. It's backwards and it needs to be changed from the ground up.