Posted: Mar 30, 2013 9:13 am
Macdoc wrote:Regarding banks creating "new money", I stand by what I said. Fractional reserve lending is not "new money", as it is accounted for. It doesn't cost anything and it doesn't add to inflation (that I know of). "new money" is what the central banks create when they buy government bonds or print money.
epete it adds to the money supply = that's the main goal is to match money supply with demand/growth and it works if it's coralled into that zone.
If lending is too loose and based on false valuations then it is inflationary tho not in the way that printing new money is.
Fair enough. I guess I was thinking 'in excess of economic growth'.