Avoiding an approaching catastrophic crisis is achievable

Debt crisis damage is the worst consequence of business processes. The totality of damage caused by debt crises is the visible image of a common economic crisis.

With regard to the worst consequence, there are two ways of issuing money:

1. without counteracting the worst consequence.

2. counteracting the worst consequence.

Today, the central bank is a local manifestation of a widespread worldwide mistake to issue money without counteracting its worst consequence. The central bank's irregularity is the major cause of damage caused by debt crises.

Today, the public neglects the substantial cause of the worst economic consequence.

To delay the national financial collapse, the government borrows. These loans are for paying damages from the Central Bank's mistake.

Now, to help the government (rather than introduce proper money issue), the central bank applies a reduced base rate.

Example: In the country concerned, if the central bank had not lowered the basic interest rate - in that country the crisis would have started.

Government loans and lowered base interest rates are approaches to delay the onset of a national economic crisis. Their realization is at the expense of future increased damages.

Even with the trillions of dollars in worldwide damage caused by the malfunctioning of the central bank, there are people who are misled that they will not be hit by a banking mistake.

Proper issuance of money is required.

Example: If the central bank issued money counteracting the worst consequence, the government would have no current debt.

If the bank irregularity is maintained, the damages are increased.

The national crisis will start when:

(1) the government and / or significant participant in the business life have no opportunity for new debt;

and / or (2) an increase in the principal interest rate of the central bank;

and / or (3) the prime interest rate ceases to play a cardinal role for the market price of money.

Avoiding an approaching catastrophic crisis is achievable.

Sustainable government prosperity is possible when the central bank is improving and issuing money counteracting the worst consequence.

Ivan Mitev - economist

The English to English translation is via Google's translator