Reply #11: Currently, the treasury and the fed allow the money supply to be expanded [View All]

[AtheistCrusader]

via fractional reserve banking. Money created out of pretty much nothing, at the point of sale (the bank) making the loan. It doesn't even exist as paper money in most cases.

One cannot do this with a fixed pool of XYZ resource, whether it be Bitcoins or Gold. Bitcoin was set up as a fixed amount of currency, once it reached full distribution (Mining done) and would not expand further.

This is nice to reduce inflation, but like our being on the gold standard so long ago, it constrains the creation of money to supply the needs of robust credit, which fuels our economy. Without it, we would grow at a much slower rate, and so would the rest of the world.

Granted, there are environmental, and malfeasance arguements that might show such slower growth to be better than what we have now, which has enabled rapid growth, consumption of resources in staggering quantities, and rampant cronyism and fraud in the financial systems. But that's a separate discussion.