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The major gap in your understanding: Bank insolvency != business cycle. Canada does indeed experience business cycles like every other significant economy. Ther
by lend000 9y ago
The major gap in your understanding: Bank insolvency != business cycle. Canada does indeed experience business cycles like every other significant economy. There are some examples in this article, if you don't believe me:
http://www.thecanadianencyclopedia.ca/en/article/business-cycles/ http://www.thecanadianencyclopedia.ca/en/article/business-cy...
- eesmith 9y agoDoes that meant that your comment had little or nothing to do with the "panic and a crash every few years" from the comment of nerdponx that you were replying to? Because I thought they were connected, and was following that same topic of "panic and crash".
- lend000 9y agoI do not know why you think "panic and crash" is specific to a run on the bank / forced bank restructuring. By the way, the original comment was about business cycles in general (that nerdponx replied to): > Are business cycles in the modern sense (unemployment that lasts for longer than six months) known to happen in the presence of free banking and absent a central bank? Actual question. It matters because we know how this happens when a central bank controls the currency supply and allows NGDP to drop. It's not obvious to me that this happens with free banking. Hope that clears everything up. I don't like arguing semantics for virtually no reason, but in this case it appears you legitimately misunderstood that the terms business cycle, market panics, and crashes are not specific to banks.
- eesmith 9y agoYou are correct in your interpretation. Much thanks for your time.