Under a fractional reserve monetery system: inflation causes prices to swallow savings, and deflation causes defaults. Both are bad. The reason for this is that in a fractional reserve system debt is always larger than the money available to pay that debt. This means that if the banks don’t continue to expand the money supply people will default and if they do continue to expand the money supply then prices will rise, and swallow up the savings. (It is important to note that this wouldn't happen in a full reserve system, because a full reserve system means that debt is never larger then amount of money available to pay that debt.When fractional reserve is done to other countries most smart people called it neo-imperialism, when the Fed does it here they call it Keynesianism or progressivism.
Robert Hass's poem, Ezra Pound's Proposition, is rather stunning in the way it presents the invisible connections between International finance and prostitution.
Robert Hass:
Ezra Pound's Proposition
from Vol. 36 No. 5
Beauty is sexuality, and sexuality
is the fertility of the earth and the fertility
Of the earth is economics. Though he is no recommendation
For poets on the subject of finance,
I thought of him in the thick heat
Of the Bangkok night. Not more than fourteen, she saunters up to you
Outside the Shangri-la Hotel
And says, in plausible English,
"How about a party, big guy?"
Here is more or less how it works:
The World Bank arranges the credit and the dam
Floods three hundred villages, and the villagers find their way
To the city where their daughters melt into the teeming streets,
And the dam’s great turbine, beautifully tooled
In Lund or Dresden or Detriot, financed
by Lazard Freres in Paris or the Morgan Bank in New York,
enabled by judicious gifts from Bechtel of San Fransisco
or Halliburton in Houston to the local political elite,
Spun by the force of rushing water,
Have become hives of shimmering silver
And, down river, they throw that bluish throb of light
Across her cheekbones and her lovely skin.
is the fertility of the earth and the fertility
Of the earth is economics. Though he is no recommendation
For poets on the subject of finance,
I thought of him in the thick heat
Of the Bangkok night. Not more than fourteen, she saunters up to you
Outside the Shangri-la Hotel
And says, in plausible English,
"How about a party, big guy?"
Here is more or less how it works:
The World Bank arranges the credit and the dam
Floods three hundred villages, and the villagers find their way
To the city where their daughters melt into the teeming streets,
And the dam’s great turbine, beautifully tooled
In Lund or Dresden or Detriot, financed
by Lazard Freres in Paris or the Morgan Bank in New York,
enabled by judicious gifts from Bechtel of San Fransisco
or Halliburton in Houston to the local political elite,
Spun by the force of rushing water,
Have become hives of shimmering silver
And, down river, they throw that bluish throb of light
Across her cheekbones and her lovely skin.
No comments:
Post a Comment