»If we do
not demonstrate our determination to organize national finances sustainably, we
will have neither financial stability nor sound economic growth«.
– Ben Bernanke
FED President
The central banks have for a long time been
unable to cope with their task of regulating the money supply so as to create
financial stability. How are they supposed to be able to stabilise a
complicated system whose basic functions are constructed in a way that is
dysfunctional and contrary to nature?
The Natural Economy of Life is a
self-regulating system. The money supply stabilises automatically through the
cycle of growth and decay. And how does it work with the supply of goods?
Let’s assume that a vital product, for example
an item of food, is in short supply. There may be different reasons for such a
situation. The crop may have been destroyed by hail or production has become
too cost-intensive and is no longer worthwhile. The distances for transporting
the product may be too long or the work too laborious and there are not enough
people who want to work in its production. Whatever has caused the shortage,
the item becomes more expensive.
If it is an essential product, the costs of
living will increase and some people will no longer be able to live so
comfortably from their basic incomes. As a consequence, they will want to earn
some extra money. The highest wages and salaries are to be found where an
urgent shortage needs to be remedied, in our case in the production of a food
that is in short supply. Job-seekers will first and foremost apply for such
jobs.
The scarce product will be produced in larger
quantities again. Prices fall again and production evens off at a normal level.
The system has automatically regulated itself
without the need for external intervention. If attempts had been made to
influence the money supply, something uncontrollable – a bubble – would have
resulted.
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