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originally posted by: nonspecific
a reply to: AugustusMasonicus
Why would deflation be a bad thing?
Would it be bad for "the economy" or would it be bad for the actual people?
Fractional reserve banking predates the central bank system by sometime. Central banking just regulates the practise.
Also all currency is debt based regardless of it being fiat or backed. This isn't a bad thing it is just people hear/read the word debt and have the negative associations of that word. It is important to remember that where there is a debt there also is a credit.
Your post would suggest that you don't believe we have economic growth with a fiat currency. The economic history of the The US and western europe over the last 70 years shows otherwise.
A backed currency just acts as brake on economic growth based on an arbitrary amount of your chosen commodity. Also why assign more value to precious metal than anything else? The value if that is every bit as faith based as a fiat currency.