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[quote user="Bank Run"] Hi: Politics are economics, because the things politicians do effect the economy. The bad investment is in capital over consumer goods. The bad money is the ultimate cause of the misallocation of resources. If we had good money, "A rising output and falling price level signifies a steady increase in the standard
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Peak oil theory sounds to me like some Marxists stumbled upon the concept of scarcity.
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Thanks krazy kaju for providing some shading to my generalizations. I didn't think about the economy in terms of "interest-based" and "consumption-based" industries vying for resources. That seems like a good way to explain a deflationary spiral. So I guess the question is, does my sequencing make sense in general? It is important
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I'm not a professional economist, I'm a political scientist seeking a double-check on my understanding of Austrian school economics. I am synthesizing what I've learned so far, and realize I have a long way to go. What follows is what I perceive is going wrong in our economy, from a theoretical standpoint. If something is bogus, or flawed
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I think it is helpful to think of bank notes versus government backed legal tender. The evolution of the bank sprang from gold-smiths who held valuable commodities like precious metals in heavy vaults and issue certificates of deposit. They figured out that there is about an 8:1 chance a customer will come back to return the certificates of the deposit