Japan's gross debt to GDP is about 3x higher than it was when their market last peaked over 30 years ago.
https://tradingeconomics.com/japan/government-debt-to-gdp
Their gross debt to GDP hit a record low in 1980 and it was not that much higher at their market peak. Sorry, but it's not the debt that made Japan a great nation. Their debt exploded after that point and they are no where near the previous peak even 30 years later. A lot of that is due to demographics, but it's basic economics that debt servicing costs suck away investment from more productive uses.
As far as the Great Depression, it was mostly WWII that finally pulled the US out of the the great depression. Without the war, it likely would have taken a longer than 25 years to recover. I never said that the Fed caused the Great Depression. But someone else here argued that without Fed, we had market crashes every decade during the 1800s, but with the Fed, only once per century. So if that is a valid argument and not an oversimplification to claim that Fed reduces the amount of market crashes, then one must also consider the duration of the recovery -- why credit the Fed with a reduction in frequency simply based on the the data, but also not attribute to them an increase in severity or time required for recovery by looking at the same data? I suspect a higher rate of growth during the 1800s as well as the civil war fueled more volatility, but I don't have the data to claim that.
I asked why are China and Russia stockpiling a mineral or shiny pieces of metal when they could be buying other things that produce a return? Wouldn't buying other assets also boost their currency value in relation to other currencies with the added benefit of providing a return over time?
As far as the rest of your post, where did I ever say that fractional reserve banking was fundamentally flawed and a bad idea. I even admitted in my prior post that I saw a use for credit and believe that it has benefited economic growth in the past. The hazard is that I see no limit to debt monetization. You can blame the current administration for expanding the debt which is a valid point, but the national debt almost doubled under the last president, and doubled under the president before him. Both parties want debt. Where I fault the Fed is that they facilitate the debt accumulation by financing it (it's technically the US treasury which finances the debt, but if the Fed is allowed an unlimited balance sheet and is free to buy US treasuries through the secondary market...it's really a distinction without a difference...Ben Bernanke claimed that QE was not debt monetization because the balance sheet would be brought back down after the crisis...that did not happen...we started very slowly down that path, but took a u-turn...so it actually is debt monetization). This is where the proponents of MMT come in -- simply have the Fed buy all the debt issued by the treasury forever. It won't work. It has never worked anywhere else on earth before. It will eventually kill the currency. I could go on about open market operations, but this post is getting long. I'll just say that there might be a hazard to having the Fed control short-term interest rates. There is no natural law or way of knowing what the best Fed Funds rate should be today. A year ago, Powell's guess was very different from his guess today. When rates are kept too low for too long, businesses adjust to them. Accumulating a lot of debt at a low interest rate might turn out to create a problem if that debt ever has to be refinanced at a higher rate. We have seen that happen before. Some believe that the Fed has been settings up that problem for the future...time will tell.
