Comments on: Our Current Economic Crisis http://www.thomasumstattd.com/2008/10/our-current-economic-crisis/ An unusual perspective on religion, politics and life. Wed, 21 Jul 2010 02:46:16 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Nathan Malone http://www.thomasumstattd.com/2008/10/our-current-economic-crisis/comment-page-1/#comment-785 Nathan Malone Mon, 13 Oct 2008 04:40:46 +0000 http://www.ThomasUmstattd.com/?p=449#comment-785 The way the monetary system is structured, though, if everyone paid off their debts, there would be much less money in circulation. This is due, of course, to the fractional reserve banking system we have, whereby money is multiplied 10x (or even more, perhaps... I'm not sure what the current bank reserve levels are at). What would you advocate regarding the monetary system? A simultaneous return to the gold/silver standard, perhaps? I totally agree with you that debt is a bad thing, and that we should, both personally and as a nation, get out of debt. Since our currency is based on debt, though, if we were to all pay off all of our debts and shrink our money supply to 10% of the current money in circulation, that would have quite a drastic effect. The way the monetary system is structured, though, if everyone paid off their debts, there would be much less money in circulation.

This is due, of course, to the fractional reserve banking system we have, whereby money is multiplied 10x (or even more, perhaps… I’m not sure what the current bank reserve levels are at).

What would you advocate regarding the monetary system? A simultaneous return to the gold/silver standard, perhaps?

I totally agree with you that debt is a bad thing, and that we should, both personally and as a nation, get out of debt. Since our currency is based on debt, though, if we were to all pay off all of our debts and shrink our money supply to 10% of the current money in circulation, that would have quite a drastic effect.

]]>