In November 18th's remarks I wrote a piece on Quantitative Easing and its implications regarding the money supply and inflation. I received lots of feedback and would like to say thanks to those who took the time to write in. The additional questions posed were very insightful and show there is substantial interest in understanding these concepts in greater detail.
The following piece delves deeper into bank lending and its function as the primary driver of expansion and contraction of our monetary system.
Fractional Reserve Banking
This is going to sound harsh, but any discussion about economics is pointless without a fundamental understanding of the fractional reserve banking system on which our economy is built. The intricacies of this system have profound implications on everything from the money supply to credit market health to price stability and even whether reversion to a gold standard is possible. We're going to start small and lay a ... Log in or subscribe to continue reading.
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