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IPFS News Link • Economy - Recession-Depression

What Causes a Recession or Depression?


What causes a recession or depression? - the answer may surprise you. The boom and bust cycle has been rolling on for centuries now, even though we know what causes it and have the means at our disposal to stop it. Fiat currency creation (fractional reserve banking) creates distortions in the market, made worse by interest rate policies and State interventions in the economy, that result in 'bubbles' of over-expansion. When the situation inevitably destabilizes, these bubbles pop, causing lots of people to lose their jobs. The solution is to stop printing currency, remove the shackles off the economy, and let the market actually do its job for once.