Re: The Macroeconomics of Credit Money

From: anon (me_at_privacy.net)
Date: 10/11/04 

Date: Mon, 11 Oct 2004 10:00:22 -0400

"William F Hummel" <wfhummel@comcast.net> wrote in message
news:jn2gm0p1djbmomhovht0qtl1leb89eq5ni@4ax.com...
> In fact it IS the existence of the lender of last resort that
> underlies the inflationary bias in a fiat money system. Recognizing
> that the Fed cannot allow a major lender to default on its liabilities
> because it could crash the entire payment system, large banks have
> generally fallen fall prey to the "moral hazard". Their lending has
> been more aggressive than under a gold-backed system.
>

thanks. it shows again that common sense is rarely wrong.