Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Ilaine who wrote (6143)	7/20/2001 9:34:20 PM
From: Don Lloyd	Read Replies (1) of 74559

CB - ...Now, please esplain to me how credit can be created, without showing up in a bank balance somewhere. You said that the credit wasn't created by a bank so it doesn't show up in the money supply. How does that work? Whoever borrowed the money, spent it, or if they didn't spend it, they saved it. Either way, it's going to show up in a bank balance, somewhere sometime. ... Look at your credit card statement. There are three numbers - Total Credit Limit, New Balance, and Available Credit. The Available Credit doesn't show up in a bank balance, and whether or not it is officially part of money supply, it has the same sort of inflationary affect as it partially replaces the need to hold cash balances. Regards, Don

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