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Natural money is completely sound. The cessation of interest collection and fractional reserve lending does not produce deflation but a cancellation of inflation. When inflation is corrected, that is a good thing.
>>"Deflation would quickly turn growth or mild recession into a full blown viccious cycle of depression."
You must distinguish between prices and value. In an inflationary monetary system, prices are constantly out of sync with value, because of the distortions introduced by interest charges and the fractional reserve multiplier. Prices are constantly forced to adjust because the supply of money is growing faster than the value of the underlying assets. We can see that this is so by observing the prices of debt-backed assets during a crash- prices plummet, because the prices are fictions distorted by unnatural money.
In a natural money system, the medium of exchange ( the currency ) is convertible into a tangible asset. Prices remain an honest depiction of value, and without the torque of interest on the money supply, prices and value remain in sync.
The reason why the propaganda against honest money is so strong is this: the bankers' only product is dishonest money that has no real value and thus distorts prices. This distortion of prices provides opportunities for speculators to buy assets low and then sell at a higher price once inflation distorts prices. The paper profits are then moved into assets that survive the inevitable credit-driven collapses.
http://www.naturalmoney.org/introduction.html
Natural money is completely sound. The cessation of interest collection and fractional reserve lending does not produce deflation but a cancellation of inflation. When inflation is corrected, that is a good thing.
You must distinguish between prices and value. In an inflationary monetary system, prices are constantly out of sync with value, because of the distortions introduced by interest charges and the fractional reserve multiplier. Prices are constantly forced to adjust because the supply of money is growing faster than the value of the underlying assets. We can see that this is so by observing the prices of debt-backed assets during a crash- prices plummet, because the prices are fictions distorted by unnatural money.
In a natural money system, the medium of exchange ( the currency ) is convertible into a tangible asset. Prices remain an honest depiction of value, and without the torque of interest on the money supply, prices and value remain in sync.
The reason why the propaganda against honest money is so strong is this: the bankers' only product is dishonest money that has no real value and thus distorts prices. This distortion of prices provides opportunities for speculators to buy assets low and then sell at a higher price once inflation distorts prices. The paper profits are then moved into assets that survive the inevitable credit-driven collapses.
http://www.naturalmoney.org/introduction.html