The need for fiat currency
In a recent post, I'd expressed concern that the current economic slowdown is a symptom of structural issues, rather than just a liquidity crunch. My main argument is that, the slowdown we are seeing, is actually a result of the massive economic growth we saw in the last few years leading to increased capability for value addition, and a resultant increase in demand for money supply. Money supply is not the same as liquidity crunch. In the latter, there is enough money in the system to cater to its demands, but the money is not "flowing" (probably due to hoarding and distrust). But, money supply scarcity is an even more fundamental problem. It refers to the dearth of money itself, to meet the growing demands of the economy. There is a recent video (in Kannada) on social media, that makes a pretty convincing case that the current slowdown is not due to structural issues with the economy. The speaker likens the slowdown to us deciding to walk for 15 kms and taking a