|
Why is it that paper money distorts financial decisions, commercial and domestic?
|
Its future value can not be known;
it will be set by the whim of politicians. So no plan can be formed.
Banks are artificially eager to make
loans, using the Fractional Reserve system; money is "too easy" to borrow and therefore borrowers will not
make a proper, sound assessment of risk and reward.
Public demand is unpredictable, for
the goods or services a business produces - because future prices are unpredictable, being affected by
unknown future inflation rates. Therefore, it's just as likely that a factory will produce too much or too few
as the quantity that happens to be just right, maximizing profits.
Business is always affected by
competition, and some of that is foreign, and some of that is indirectly subsidized by US Government
handouts of its dollars to foreign countries it favors.
|