And when management asks that you work 10 extra hours a week for the same amount of pay? You're in a much better position if you have several months of living expenses to painlessly tap into.
> Monetary policy acts against this by pushing up interest rates when it believes there is too much credit and pushing them down when there is too little.
Well they're certainly avoiding the whole "pushing up" part. If they were smoothing the cycles out in a sustainable manner, we wouldn't be talking about negative interest rates. Instead, they lower interest rates and keep them there because economic reality is politically inconvenient.
> In fact, more people have been lifted out of poverty under inflation targeting than under any other period of stability in history
How much of this can be attributed to natural technological progress rather than economic planning? And what percentage of the excess wealth (compared to an undriven economy) has been actually used to raise people out of poverty? It's not sustainable progress to get the masses out of poverty if you've used up most of the natural resources in the process.
> Money is created through bank loans. The banks and the government do not receive the money first. The person who borrows is the first recipient.
The person who borrowed is the second recipient, the bank takes the first cut through fees and increased interest. The government gets to tap into the supply through perpetual deficit spending.
> If the quantity and demand for money and the number of products on the market were fixed, then the decrease in the nominal price of one good would necessarily cause an increase in the nominal price of others
But the average (index) remains constant only if you ignore the option to save money for the future, and assume that everything earned must be immediately spent (which is precisely what were debating). When prices go down, total amount of money spent on goods should go down. This money will be saved to give one security and mobility. The price of labor should then rise, and people should be working less. Instead, the savings are eroded through inflation, and workers are kept on a constant treadmill.
What I really have to ask, if these central banks are really doing the optimal benevolent thing, then why do they violently shut down competition? Surely the currency they "stabilized" should win out in the market over possible competitors.