The change of the total amount of money in the economic system is strictly connected with the change of the total value of sold goods.
Article Trading with direct lending
Dear @Abedallah
I hope You know that the Federal Reserve is the main organization of modern fraudulent financial system.
The following report discusses the monetary policy:
MONETARY POLICY: Most of the monetary theory discussed in earlier chapters is oriented toward the development
of proper monetary policy. In the American economy, our central bank, the
Federal Reserve System (or Fed) is responsible for implementing monetary policy. The
Federal Reserve System has traditionally had a mandate with multiple objectives. These
objectives have generally tended to fail under four categories.
1 The Fed must try to do the following:
1. Protect the banking system from the kinds of financial emergencies that episodically
did enormous damage.
2. Promote price stability.
3. Promote interest rate stability (sometimes called credit market stability).
4. With the cooperation of other central banks, promote international financial stability.
The Federal Reserve System accomplishes the first objective by regulating and auditing
the activity of the nation’s private commercial banks. The Fed is the depository for member
bank reserves (hence, the name) and can act as a lender of lust resort to troubled banks. In
other words, if there is a run on a bank for any reason, where depositors make heavy
withdrawals, the Fed can lend the troubled bank as much money as is needed to prevent a
liquidation of the bank’s assets
See the report at the page:
http://www2.hmc.edu/~evans/chap21.pdf
Dear @Abedallah
I hope You know that the Federal Reserve is the main organization of modern fraudulent financial system.
The control of inflation has become one of the dominant objectives of government economic policy in many countries. Effective policies to control inflation need to focus on the underlying causes of inflation in the economy. For example if the main cause is excess demand for goods and services, then government policy should look to reduce the level of aggregate demand. If cost-push inflation is the root cause, production costs need to be controlled for the problem to be reduced.
For more informaation you may look at the following link:
http://tutor2u.net/economics/content/topics/inflation/controlling_inflation.htm
I agree that trading with direct lending is an effective anti-inflationary tool.
Functioning of anti-inflationary tool is based on a strict connection changing the total amount of money in the economic system with the change in the total cost of goods sold.
Simply, the definition of inflation may be summarized as follow:
The cost of goods and services are getting higher
The money is worth less, compared to foreign money
The government increases the money supply, other than just to replace
old money it destroys.
The Fight Against Inflation- case of Serbia is fine research paper related to your thread! Direct lending may be an effective anti-inflationary tool! There are some other approaches also!
http://erasmus-mundus.univ-paris1.fr/fichiers_etudiants/113_dissertation.pdf
Chinese have done brilliant job of bringing down inflation by keeping restricting credit to sectors which have low contribution towards job growth. Thus, controlling credit to certain sectors is a good policy to ensure availability of credit to imp sector and at the same time reducing money supply by creating restrictions on credit issue to low priority or non-growth sector.
Further it helped them stop the bubble burst as it ensures release of air in a controlled manner
Bank lending (as opposed to direct lending) is one of the factors of inflation. Management methods used by Central banks, cannot change the inflationary nature of Bank lending.
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