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To: bart13 who wrote (79021)9/5/2011 9:39:45 AM
From: carranza2  Read Replies (2) | Respond to of 217732
 
Jesse's point I think is correct because it corresponds with yours, I.e., credit is not money until it is used to buy something. An unused credit line is not money.



To: bart13 who wrote (79021)9/5/2011 8:48:35 PM
From: Hawkmoon  Respond to of 217732
 
Credit is definitely money in a fractional reserve system. But it must be a loan that is repaid for it to truly add to money supply. Otherwise, the loss to the lender from a default represents a decrease in money supply as well as a transfer of wealth.

In a non-fractional reserve system, it merely represents a transfer of wealth between the lender and the borrower when the debt is in default.

Hawk


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