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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (43022)	9/10/2002 10:54:01 AM
From: maceng2	Read Replies (1) \| Respond to of 281500

By definition, this is incorrect. and also in response to your other post.. There always is a little gold sloshing around banks so some of the notes issued by banks are receipt notes. The rest (by far greater amount) have no backing whatsoever except by law you have to accept them. For convenience I called those "fiat" notes. It's an extended fractional reserve banking system. This page (not the rest of link) gives a very clear statement of my understanding. basicincome.com Thanks for your link. I understand the reluctance to not "stamp on a bubble". It would be better for them not to form in the first place. An excess of credit means there is too much investment and a "virtual market" is formed. As the underlying demand is less, this business will have to contract at some stage. If only receipt money was allowed for investment, bubbles would not form. People would only invest if they felt sure of a prospect. In fact it's my belief the world would be a much happier place. I don't understand how anyone can be "confused" on this.