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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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From: Eva12/20/2010 12:14:13 PM
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update -- trotsky, 10:04:46 12/20/10 Mon
Money and Credit - there is a difference. An article elucidating what exactly differentiates money and credit in a fractionally reserved fiat money system and how they are interlinked. In the context of the inflation/deflation debate we note that the so-called 'shadow banking system' was never able to directly create money. It did however enable banks to create both more credit and money by getting assets off their balance sheet they would otherwise have had to reserve against. We also look at the question if a genuine deflation is possible in a fiat money system and how it could theoretically happen - while also noting that in practice, the monetary authority has not allowed it to happen thus far. The money supply has continued to increase by leaps and bounds even during those times when the commercial banking system's inflationary credit creation process underwent a period of negative growth.

acting-man.com

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