Post
Topic
Board Economics
Re: Freicoin (was Re: Deflation and Bitcoin, the last word on this forum)
by
MoonShadow
on 27/09/2011, 22:23:04 UTC
No, I didn't.  This is another way to look at the Austrian Economic theory of the business cycle.  Most of the time Keynes is given no credit, however he wasn't just some hack.

The Austrian School says the root cause is excess credit expansion, at least according to Wikipedia.

Yes, and even under a gold standard, credit can expand excessively due to the mood of the loan officers and their employers.  The manipulation of the free market interest rate, commonly practiced by central banks today, make this effect worse but are not the cause of it.  The business cycle did, and would still, exist within a sound/hard monetary system.  It just tends to not reach the same level of malinvestment nor persist for as long before the correction phase.  The correction phases prior to the establishment of the Federal Reserve were called "panics" and the booms were called "manias", but usually only in retrospect.  A quick google search and it will become quite obvious that the business cycle exists in every monetary system ever devised, and will continue to do so.  Bitcoin isn't immune either.