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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (29934)4/3/2005 3:09:06 PM
From: Elroy Jetson  Read Replies (2) of 110194
 
That's great. Bob Hoye understands the situation clearly. A view which is quite atypical today.

Expanded credit should never be counted as an increase in the "money supply" as the Fed does. It is merely an increase in monetary velocity. This has long been known.

Henry Thornton, in his 1802 book, "An Enquiry into the Nature and Effects of the Paper Credit of Great Britain" correctly described an increase in credit issued as an increase in the velocity of circulation of existing money, not an increase in money as monetarists mistakenly claim.

Monetarist economists like Ben Bernanke and Milton Friedman believe the problems created by excessive credit issuance and fiat money creation can be solved with an even greater expansion of credit and fiat money issuance. The futility of this concept can be quickly grasped, even by small children.
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