Shift in Judgment

It's no accident in my youth, when Nixon closed the gold window (and we went off what gold standard we had) that credit card companies flourished.  By the time I was 25, I had some 30 cards.  (Now I am down to one debit card).  Inflation was baked into the cake, and I was in on the game.

Inflation is the printing of more currency than you have backed by money (usually gold).  Those who first get the new money spend it into the economy, before its appearance as more money chasing the same amount of goods causes prices to rise.  The insiders win automatically.  The time element is crucial in this game.  Not timing, but where are you in the time continuum after the excess currency is introduced.  Almost everyone is on the losing end of this policy.

Once you go off the gold standard, which is a policy decision, then it is just a matter of playing one side or the other of the policy.

There is naturally a gold standard, absent the State.  Any banker who prints more currency than he has assets finds himself in a run, and out of business.  The people are the central reserve.

But we have a Central Bank, and here is a professor with an opinion:

A prolonged and sustained central-bank policy of purchasing ever-increasing quantities of long-term assets is essential to get a financial sector with diminished appetite for risk to use some of its risk-bearing capacity for its proper purpose of reducing the risk burden on entrepreneurship and enterprise.

You see what is happening here, in the professor's mind business is about which policies have what outcomes.  Right now the policies are bad, based on the damage done by bad policies, following bad policies, ad nauseum.  When the state intervenes, there is a shift from judgment about customer needs to judgment about possible government policy changes.  The effects are devastation, war, poverty and so on.  Get the State out of money and credit.

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