Being able to lend money cheaply and easily by printing new dollars every time a loan is approved is a mistake. It’s called malinvestment and it enables firms t

Being able to lend money cheaply and easily by printing new dollars every time a loan is approved is a mistake. It’s called malinvestment and it enables firms that would not normally receive funding in a truly free market to do so. In a hard money system the amount of loans would be far less, and the use of equity would be much more popular over debt. This is a matter of philosophy and I understand what I’m advocating for is a radical departure from the current system. One major issue of our debt-based, easy-money society is that everyone understands the Fed explicitly backs the regulated banking system from default and implicitly backs the shadow banking system, as the collapse and subsequent bailout of less-regulated firms has repeatedly shown us. The profits are privatized and the losses are socialized. Another problem is that all firms eventually revert to being financial services firms - it is more profitable for Macy’s to provide 20% interest credit cards than it is to sell clothes (half their revenue pre-bankruptcy) with the clothes merely a means to get people signed up for credit cards. They accomplish this by being able to borrow from the capital markets at very cheap rates, then lend their cheap money to consumers at high rates, and then securitize and resell the debt. What I advocate and want is impossible to achieve. Instead I make my own investments and plans based upon my knowledge of the world, the financial systems, and how things shake out. For example, the 30 year fixed rate mortgage is a both a huge subsidy to the well-off and one of the few ways you can build wealth to protect against inflation. The situation with housing is complex but the end result is what you see everywhere in developed countries - ever increasing prices and society-wide view of property as an investment - not only the US but especially in Canada. Buy as much property, for as much government subsidized debt, as you as an individual can afford.