It is counterproductive to use wrong definition to discuss anything. The current misuse of the word inflation leads to all kinds of mischief and false beliefs.
Rising prices are not inflation. Regardless of how many times however many persons make the false claim that inflation means a rise in prices, logically, this can never be. Every economist who utters that false belief reveals himself to suffer from intense indoctrination, revealing that he or she lacks knowing the nature of money, credit, banking and central banking. Many believe, falsely, inflation and deflation are changes in prices rather than causal to such.
Concepts are invariant. The authentic concept of inflation that the word inflation once labeled has not changed, ever. And it means today what it has meant always, whether the monetary system is specie money based or fiduciary money based.
WHAT IS CREDIT?
Credit isn’t money. That should be obvious to all, at once. If credit were money, we would have but one word in our language and not two words, each which label separate concepts.
In past, Credit was a postponed payment of money; a promise to pay money at a time in the future.
Today, credit is postponed payment of cash or bank credits.
Credit is a right of action to demand the price of goods, which is given in exchange for goods, that is, a right of action against a person to pay or do something; itself is a property, an exchangeable right; produces the same effects as money or cash until paid off and extinguished; a right to collect on a promise to deliver a thing of goods or money or cash; is a right of action a man makes against himself when he promises to pay at a time in a future; the right to demand money.
Credit is auxiliary to money; supplemental to money; can get exchanged against goods; can get exchanged against other credit. Credit is a vendible commodity and thus can get sold or exchanged any number of times, like any material chattel until it gets paid off and extinguished.
Credit can become currency — that which has bearer negotiability and circulates goods — if title can get transferred, hand-to-hand. Credit is worthy as property in trade only to the extent to which another will take it for property in something else.
HOW DO WE KNOW THAT CREDIT IS NOT MONEY?
Credit has the power of purchasing, but is not money. Credit instruments can mediate trade. However, not always is someone willing to accept offered credit. Credit can collapse as persons can refuse to pay or lack the means to pay.
Always, though, a possessor of money has the power of purchasing, always.
WHAT IS MONEY AND WHAT IS CREDIT?
Money is coined metal by weight and fineness. The Romans said so. It's their word. When money existed, money had these qualities.
When it existed, money rested upon the belief that any man would take it in a swap. Money made value (a ratio, a trade rate) because property in money could trade for property in something else.
When it existed, money was a good that has greater exchangeability than all others. When it existed, money would get offered for goods other than money. In short, money had one use — to be spent.
Money gave its holder bearer negotiability. One's property in money (right of ownership) passed along with honest possession in every purchase and sale. There was no need to inquire if the one offering money had title before trying to buy a thing. Because of bearer negotiability, property and the possession in money were inseparable.
Money was that commodity that anyone can receive freely in exchange for what he or she has but does not want to keep for himself or herself, taken in trust, that with it he or she can, at any time, get from others what they have but do not want to keep for themselves.
A banking system can have money or fiduciary cash. Without going into great detail, fiduciary cash depends partly or wholly on the confidence that the owner can trade it for other goods.
Today, you live with fiduciary cash of negotiable bank credits. You do not have money whatsoever.
Under a specie money system, money is only gold or silver coins. Under a fiduciary money system like we have today, money does not exist. Federal Reserve banknotes and U.S. Treasury token coins — half-dollars, quarters, dimes, nickels, pennies — have taken the place of money.
There is money and then there is credit. Money were to exist could settle credit, always. Yet, in the final settlement, money could extinguished credit.
Money can exist without banking or lawgivers. Cash must have bankers to exist. For it to exist, legal tender cash must have lawgivers and their agents of enforcement as well as bankers.
WHAT ARE ECONOMIC QUANTITIES OF PURCHASING?
A quantity is anything that can get measured and an economic quantity is anything that can get measured by wealth (property of trade).
Because negotiable credit and cash are measurable quantities and because both get used in trade, credit and cash are an economic quantities; and because both get used in exchange, credit and cash are economic quantities of purchasing.
WHAT IS CURRENCY?
Currency is the circulating medium — that which someone holds in the middle ground. The key to coming to see and then to understand what is currency is to know what has bearer negotiability.
Bearer negotiability is an aspect embodied in money as well as negotiable debt instruments. In essence, bearer negotiability means the right of ownership in a thing gets passed along with honest possession in every sale or every exchange. The property and the possession are inseparable. Typically, bearer negotiability gets recorded on those things that could be lost, stolen, or sold and then used by another.
No need exists to inquire as to the title of ownership to money or negotiable debt instruments offered by anyone in exchange for goods. That is bearer negotiability.
Today, currency consists solely of cash, which is bank credit circulating in perpetuity. In practice, cash has bearer negotiability.
In our fiduciary monetary system, only Federal Reserve banknotes and U.S. Treasury token coins are currency. Most often, ATM debit cards, credit cards, and bank checks have bearer negotiability. Rare are the times when these instruments lack bearer negotiability, but it happens.
Thus, currency is that which has the power of purchasing and resembles money, sometimes called money substitutes, although far too many include far too many things as so-called money substitutes. In short, currency consists of cash and checkable deposits.
In the U.S., the St. Louis Federal Reserve tracks these, which constitute currency:
FROM WHENCE DOES CURRENCY COME?
Bank credit becomes extant through currency accretion — the addition of new Federal Reserve banknotes and U.S. token coins along with negotiable bank credits joining in circulation with existing ones.
It is banking customers themselves who call for currency accretion in the form of notes and coins. When the Wednesday through Saturday average of cash withdrawals from ATMs and bank tellers rise, central bankers of the Federal Reserve order the U.S. Treasury to mint more notes and coins.
WHAT IS INFLATION?
Inflation arises from purpose-driven process undertaken by central bankers — Federal Reserve bankers in America — to increase the number of products sold by their member commercial bankers — opened contracts of credit.
Inflation is a rise in bank credit over deposits subsequent to acts undertaken by central bankers that attempt to increase credit outstanding.
INFLATION AND MONETARY SYSTEMS
In the days of specie money, inflation was the word use to label an increase in banknotes issued over specie money deposited.
When central bankers reduce the inter-bank lending rate or reserve requirement ratio in hopes of its member commercial bankers selling more of their products — opened contracts of bank credit — that is attempt at inflation. Whether or not that an actual increase in sales arise — a rise in non-revolving credit outstanding or a rise in revolving credit outstanding — remains to be seen.
THE TRUE CAUSE OF RISING PRICES
Prices rise or fall owing to the one, true, great infrangible law of economics — the Law of Prices. The Law of Prices holds that the winning bids of purchase and sale in the face of what is on offer sets the price.
Beliefs must arise from a logically consistent bedrock. The Law of Prices is that bedrock.
Often, the amount of the winning bids can increase if the economic quantities of purchasing increase. Today, that means an increase in currency. The true cause of price increases are winning bidders willing to spend more than previous winning bidders in the face of output.
When either the entire stock of currency or the flow (turnover) of currency increases relative to all output of the economy, that is, whenever there is a rise in economic quantities of purchasing relative to goods; then there shall be a tendency for all prices to rise.
Prices only rise if winning bids rise faster than output of products.
AGGREGATE PRICE LEVEL AND THE CPI: BOGUS CONCEPTS
No such thing as a monolithic price level exists. That is mere fantasy conjured by bad economists, notably, Irving Fisher. The price of any product sold fluctuates solely because of winning bidders.
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services [see: Consumer Price Index Frequently Asked Questions (No. 1) ]
The rest of the CPI frequently asked questions gives a cursory overview of the index but fails to mention hedonics and exactly what are the products carried in the market basket [see:Consumer Price Index Frequently Asked Questions ].
In truth, the CPI is hypothetical and does not represent anything meaningful. The CPI makes for great persuasion in propaganda and thus great politics, but it's bogus with respect to authentic economics. Certainly, it does not measure inflation.
The payment method for some goods hinges on non-revolving credit, e.g., houses, college tuition. Thus when persons get less non-revolving credit or when fewer persons get such non-revolving credit, the amount of winning bids falls and in the face of supply, prices drop.
The payment method for some goods hinges on revolving credit, typically casual wear clothing, meals eaten out at sit down restaurants, tickets to attend sporting events, airline tickets. When persons get less revolving credit or when fewer persons get such revolving credit, the amount of winning bids falls and in the face of supply, prices drop.
The payment method for some goods hinges on money (cash) or credit that clears so amazingly fast that in all essence seems to function like cash. Such credit instruments are ATM debit cards and less so, checks drawn on checking accounts. The typical goods with prices dependent on cash include gasoline, groceries, cigarettes, booze, beer, wine, condoms, movie tickets. When persons get more cash because they increase their cash holdings in preference to credit that either they cannot get or do not want, the amount of winning bids rises and in the face of supply, prices rise.
HOW TO MEASURE THE EFFECTS OF INFLATION AND MONEY ACCRETION ON PRICES
When the rate of inflation rises faster than the rate of output of goods exchanged primarily for non-revolving credit, inflation leads to higher prices for those products bought with non-revolving credit, primarily.
When the rate of currency accretion rises faster than the rate of output of goods exchanged primarily for currency, currency accretion leads to higher prices for those products bought with currency, primarily.
WHAT IS AUTHENTIC PRICE INFLATION?
Price inflation does not mean a rise in prices. Fiscal policy is the source of price inflation. It is an attempt to get persons to rent cash from bankers by forcing up prices.
Prices get forced up by having the government become an even bigger bidder for goods, which leads to bank credits expansion — inflation — and currency accretion. Merely, central bankers become the highest bidders of new bond issuance by government. Today, this is known as quantitative easing.
WHO IS A COMMERCIAL BANKER?
Anyone who knows about Commercial Law today knows that a banker is a trader who buys cash and debt by selling bank credits. A depositor sells his cash or bank credits to a banker, which is a muutum that in law and commerce gets called a deposit and buys bank credits, which are rights of action against a banker, that is, the right to claim future cash.
Bank customers have rights of action to demand an amount of cash from bankers at a future date. Evidences of such rights include checking account bank statements and passbook savings books.
Of course, under U.S. Commercial Banking Law, bankers have up to 30 days to meet those obligations.
FEDERAL RESERVE BANKERS AND INFLATION
Federal Reserve central bankers do not hide this foregoing truth. Merely they do not explain it this way. It would become obvious to the woman and man on the street that the forever march of upward prices reflects increases in economic quantities of purchasing of which bankers and Congress are causal.
Mind you, bankers want output to grow at a faster rate than currency accretion and inflation rate because when that happens living standards rise wholly for many. Yet, the primary goal of commercial banking is to profit from the sale of revolving and non-revolving bank credits.
SHOULD YOU OPPOSE COMMERCIAL BANKING?
A banker is no different than a retailer who buys merchandise from a wholesaler or manufacturer by selling a 30-day net invoice, 60-day net invoice or whatever are the mutual terms between the parties.
Under Commercial Law, as the same for bankers, the retailer becomes the owner of the goods. The wholesaler or manufacturer relinquishes all title of ownership to said goods to the retailer. Likewise, the wholesaler or manufacturer gains a right of action against the retailer as evidenced by the invoice.
If your dads did not teach you this legal truth, now you know it. When you deposit cash, you are selling it for bank credits. You give up title of ownership to the cash you deposit.
Bank credits give you a right of action to the cash in a future of the same amount. This is a right, merely. You must assert your right. It is possible that even when your right gets upheld, you cannot collect any cash.
It is not true that bankers create cash from thin air; nor do bankers lend out other people's cash.
Now, if anyone has a beef, most likely it is that commercial bankers can whip up checking account credits from nothing, putting those on their accounting ledgers, selling those to depositors while buying cash from depositors.
Yet, if anyone opposes that, that one must oppose the concept of credit itself. And what the banker does, so too does the retailer who buys on credit, merchandise from the wholesaler; and so too does the wholesaler who buys on credit merchandise from the manufacturer.
Opposing commercial banking is tantamount to opposing credit. Credit is the great engine that has raised up mankind. It is the true source of human achievement and advancement.
Perhaps credit is the greatest invention from the minds of men, maybe even greater than potable water systems and sewer systems. For it is through credit that men call forth the future into the now.
FRACTIONAL RESERVE BANKING AND CONSPIRACY THEORISTS
Conspiracy theorists believe that double claims of ownership exist on money deposited with a banker and thus fractional reserve banking must be fraudulent. Of course it is not fraudulent. Men have crafted laws to make it legal. Rightly, a deposit is a sale for bank credit and a right of action against a banker.
Conspiracy theorists could say the fractional reserve banking has been designed wrong. Yet if they did so, they would get forced to say that all credit suffers from wrong design. Because what commercial bankers with depositors do is what retailers do with wholesalers, exactly.
If conspiracy theorists knew how central banking worked, they could render a great argument against central bankers over monetizing government debt by issuing bank credits to government agencies without first taking deposits.
This, of course, should be banned as it robs savers of cash of buying power through the effects of money accretion and of course, money accretion leads to unit buying power loss.
Rising prices are not inflation. Regardless of how many times however many persons make the false claim that inflation means a rise in prices, logically, this can never be. Every economist who utters that false belief reveals himself to suffer from intense indoctrination, revealing that he or she lacks knowing the nature of money, credit, banking and central banking. Many believe, falsely, inflation and deflation are changes in prices rather than causal to such.
Concepts are invariant. The authentic concept of inflation that the word inflation once labeled has not changed, ever. And it means today what it has meant always, whether the monetary system is specie money based or fiduciary money based.
WHAT IS CREDIT?
Credit isn’t money. That should be obvious to all, at once. If credit were money, we would have but one word in our language and not two words, each which label separate concepts.
In past, Credit was a postponed payment of money; a promise to pay money at a time in the future.
Today, credit is postponed payment of cash or bank credits.
Credit is a right of action to demand the price of goods, which is given in exchange for goods, that is, a right of action against a person to pay or do something; itself is a property, an exchangeable right; produces the same effects as money or cash until paid off and extinguished; a right to collect on a promise to deliver a thing of goods or money or cash; is a right of action a man makes against himself when he promises to pay at a time in a future; the right to demand money.
Credit is auxiliary to money; supplemental to money; can get exchanged against goods; can get exchanged against other credit. Credit is a vendible commodity and thus can get sold or exchanged any number of times, like any material chattel until it gets paid off and extinguished.
Credit can become currency — that which has bearer negotiability and circulates goods — if title can get transferred, hand-to-hand. Credit is worthy as property in trade only to the extent to which another will take it for property in something else.
HOW DO WE KNOW THAT CREDIT IS NOT MONEY?
Credit has the power of purchasing, but is not money. Credit instruments can mediate trade. However, not always is someone willing to accept offered credit. Credit can collapse as persons can refuse to pay or lack the means to pay.
Always, though, a possessor of money has the power of purchasing, always.
WHAT IS MONEY AND WHAT IS CREDIT?
Money is coined metal by weight and fineness. The Romans said so. It's their word. When money existed, money had these qualities.
When it existed, money rested upon the belief that any man would take it in a swap. Money made value (a ratio, a trade rate) because property in money could trade for property in something else.
When it existed, money was a good that has greater exchangeability than all others. When it existed, money would get offered for goods other than money. In short, money had one use — to be spent.
Money gave its holder bearer negotiability. One's property in money (right of ownership) passed along with honest possession in every purchase and sale. There was no need to inquire if the one offering money had title before trying to buy a thing. Because of bearer negotiability, property and the possession in money were inseparable.
Money was that commodity that anyone can receive freely in exchange for what he or she has but does not want to keep for himself or herself, taken in trust, that with it he or she can, at any time, get from others what they have but do not want to keep for themselves.
A banking system can have money or fiduciary cash. Without going into great detail, fiduciary cash depends partly or wholly on the confidence that the owner can trade it for other goods.
Today, you live with fiduciary cash of negotiable bank credits. You do not have money whatsoever.
Under a specie money system, money is only gold or silver coins. Under a fiduciary money system like we have today, money does not exist. Federal Reserve banknotes and U.S. Treasury token coins — half-dollars, quarters, dimes, nickels, pennies — have taken the place of money.
There is money and then there is credit. Money were to exist could settle credit, always. Yet, in the final settlement, money could extinguished credit.
Money can exist without banking or lawgivers. Cash must have bankers to exist. For it to exist, legal tender cash must have lawgivers and their agents of enforcement as well as bankers.
WHAT ARE ECONOMIC QUANTITIES OF PURCHASING?
A quantity is anything that can get measured and an economic quantity is anything that can get measured by wealth (property of trade).
Because negotiable credit and cash are measurable quantities and because both get used in trade, credit and cash are an economic quantities; and because both get used in exchange, credit and cash are economic quantities of purchasing.
WHAT IS CURRENCY?
Currency is the circulating medium — that which someone holds in the middle ground. The key to coming to see and then to understand what is currency is to know what has bearer negotiability.
Bearer negotiability is an aspect embodied in money as well as negotiable debt instruments. In essence, bearer negotiability means the right of ownership in a thing gets passed along with honest possession in every sale or every exchange. The property and the possession are inseparable. Typically, bearer negotiability gets recorded on those things that could be lost, stolen, or sold and then used by another.
No need exists to inquire as to the title of ownership to money or negotiable debt instruments offered by anyone in exchange for goods. That is bearer negotiability.
Today, currency consists solely of cash, which is bank credit circulating in perpetuity. In practice, cash has bearer negotiability.
In our fiduciary monetary system, only Federal Reserve banknotes and U.S. Treasury token coins are currency. Most often, ATM debit cards, credit cards, and bank checks have bearer negotiability. Rare are the times when these instruments lack bearer negotiability, but it happens.
Thus, currency is that which has the power of purchasing and resembles money, sometimes called money substitutes, although far too many include far too many things as so-called money substitutes. In short, currency consists of cash and checkable deposits.
In the U.S., the St. Louis Federal Reserve tracks these, which constitute currency:
- Currency Component of M1 (aka cash money, aka money — Fed Res banknotes + U.S. Treasury token coins)
- Total Checkable Deposits
FROM WHENCE DOES CURRENCY COME?
Bank credit becomes extant through currency accretion — the addition of new Federal Reserve banknotes and U.S. token coins along with negotiable bank credits joining in circulation with existing ones.
It is banking customers themselves who call for currency accretion in the form of notes and coins. When the Wednesday through Saturday average of cash withdrawals from ATMs and bank tellers rise, central bankers of the Federal Reserve order the U.S. Treasury to mint more notes and coins.
WHAT IS INFLATION?
Inflation arises from purpose-driven process undertaken by central bankers — Federal Reserve bankers in America — to increase the number of products sold by their member commercial bankers — opened contracts of credit.
Inflation is a rise in bank credit over deposits subsequent to acts undertaken by central bankers that attempt to increase credit outstanding.
INFLATION AND MONETARY SYSTEMS
In the days of specie money, inflation was the word use to label an increase in banknotes issued over specie money deposited.
When central bankers reduce the inter-bank lending rate or reserve requirement ratio in hopes of its member commercial bankers selling more of their products — opened contracts of bank credit — that is attempt at inflation. Whether or not that an actual increase in sales arise — a rise in non-revolving credit outstanding or a rise in revolving credit outstanding — remains to be seen.
THE TRUE CAUSE OF RISING PRICES
Prices rise or fall owing to the one, true, great infrangible law of economics — the Law of Prices. The Law of Prices holds that the winning bids of purchase and sale in the face of what is on offer sets the price.
Beliefs must arise from a logically consistent bedrock. The Law of Prices is that bedrock.
Often, the amount of the winning bids can increase if the economic quantities of purchasing increase. Today, that means an increase in currency. The true cause of price increases are winning bidders willing to spend more than previous winning bidders in the face of output.
When either the entire stock of currency or the flow (turnover) of currency increases relative to all output of the economy, that is, whenever there is a rise in economic quantities of purchasing relative to goods; then there shall be a tendency for all prices to rise.
Prices only rise if winning bids rise faster than output of products.
AGGREGATE PRICE LEVEL AND THE CPI: BOGUS CONCEPTS
No such thing as a monolithic price level exists. That is mere fantasy conjured by bad economists, notably, Irving Fisher. The price of any product sold fluctuates solely because of winning bidders.
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services [see: Consumer Price Index Frequently Asked Questions (No. 1) ]
The rest of the CPI frequently asked questions gives a cursory overview of the index but fails to mention hedonics and exactly what are the products carried in the market basket [see:Consumer Price Index Frequently Asked Questions ].
In truth, the CPI is hypothetical and does not represent anything meaningful. The CPI makes for great persuasion in propaganda and thus great politics, but it's bogus with respect to authentic economics. Certainly, it does not measure inflation.
The payment method for some goods hinges on non-revolving credit, e.g., houses, college tuition. Thus when persons get less non-revolving credit or when fewer persons get such non-revolving credit, the amount of winning bids falls and in the face of supply, prices drop.
The payment method for some goods hinges on revolving credit, typically casual wear clothing, meals eaten out at sit down restaurants, tickets to attend sporting events, airline tickets. When persons get less revolving credit or when fewer persons get such revolving credit, the amount of winning bids falls and in the face of supply, prices drop.
The payment method for some goods hinges on money (cash) or credit that clears so amazingly fast that in all essence seems to function like cash. Such credit instruments are ATM debit cards and less so, checks drawn on checking accounts. The typical goods with prices dependent on cash include gasoline, groceries, cigarettes, booze, beer, wine, condoms, movie tickets. When persons get more cash because they increase their cash holdings in preference to credit that either they cannot get or do not want, the amount of winning bids rises and in the face of supply, prices rise.
HOW TO MEASURE THE EFFECTS OF INFLATION AND MONEY ACCRETION ON PRICES
When the rate of inflation rises faster than the rate of output of goods exchanged primarily for non-revolving credit, inflation leads to higher prices for those products bought with non-revolving credit, primarily.
When the rate of currency accretion rises faster than the rate of output of goods exchanged primarily for currency, currency accretion leads to higher prices for those products bought with currency, primarily.
WHAT IS AUTHENTIC PRICE INFLATION?
Price inflation does not mean a rise in prices. Fiscal policy is the source of price inflation. It is an attempt to get persons to rent cash from bankers by forcing up prices.
Prices get forced up by having the government become an even bigger bidder for goods, which leads to bank credits expansion — inflation — and currency accretion. Merely, central bankers become the highest bidders of new bond issuance by government. Today, this is known as quantitative easing.
WHO IS A COMMERCIAL BANKER?
Anyone who knows about Commercial Law today knows that a banker is a trader who buys cash and debt by selling bank credits. A depositor sells his cash or bank credits to a banker, which is a muutum that in law and commerce gets called a deposit and buys bank credits, which are rights of action against a banker, that is, the right to claim future cash.
Bank customers have rights of action to demand an amount of cash from bankers at a future date. Evidences of such rights include checking account bank statements and passbook savings books.
Of course, under U.S. Commercial Banking Law, bankers have up to 30 days to meet those obligations.
FEDERAL RESERVE BANKERS AND INFLATION
Federal Reserve central bankers do not hide this foregoing truth. Merely they do not explain it this way. It would become obvious to the woman and man on the street that the forever march of upward prices reflects increases in economic quantities of purchasing of which bankers and Congress are causal.
Mind you, bankers want output to grow at a faster rate than currency accretion and inflation rate because when that happens living standards rise wholly for many. Yet, the primary goal of commercial banking is to profit from the sale of revolving and non-revolving bank credits.
SHOULD YOU OPPOSE COMMERCIAL BANKING?
A banker is no different than a retailer who buys merchandise from a wholesaler or manufacturer by selling a 30-day net invoice, 60-day net invoice or whatever are the mutual terms between the parties.
Under Commercial Law, as the same for bankers, the retailer becomes the owner of the goods. The wholesaler or manufacturer relinquishes all title of ownership to said goods to the retailer. Likewise, the wholesaler or manufacturer gains a right of action against the retailer as evidenced by the invoice.
If your dads did not teach you this legal truth, now you know it. When you deposit cash, you are selling it for bank credits. You give up title of ownership to the cash you deposit.
Bank credits give you a right of action to the cash in a future of the same amount. This is a right, merely. You must assert your right. It is possible that even when your right gets upheld, you cannot collect any cash.
It is not true that bankers create cash from thin air; nor do bankers lend out other people's cash.
Now, if anyone has a beef, most likely it is that commercial bankers can whip up checking account credits from nothing, putting those on their accounting ledgers, selling those to depositors while buying cash from depositors.
Yet, if anyone opposes that, that one must oppose the concept of credit itself. And what the banker does, so too does the retailer who buys on credit, merchandise from the wholesaler; and so too does the wholesaler who buys on credit merchandise from the manufacturer.
Opposing commercial banking is tantamount to opposing credit. Credit is the great engine that has raised up mankind. It is the true source of human achievement and advancement.
Perhaps credit is the greatest invention from the minds of men, maybe even greater than potable water systems and sewer systems. For it is through credit that men call forth the future into the now.
FRACTIONAL RESERVE BANKING AND CONSPIRACY THEORISTS
Conspiracy theorists believe that double claims of ownership exist on money deposited with a banker and thus fractional reserve banking must be fraudulent. Of course it is not fraudulent. Men have crafted laws to make it legal. Rightly, a deposit is a sale for bank credit and a right of action against a banker.
Conspiracy theorists could say the fractional reserve banking has been designed wrong. Yet if they did so, they would get forced to say that all credit suffers from wrong design. Because what commercial bankers with depositors do is what retailers do with wholesalers, exactly.
If conspiracy theorists knew how central banking worked, they could render a great argument against central bankers over monetizing government debt by issuing bank credits to government agencies without first taking deposits.
This, of course, should be banned as it robs savers of cash of buying power through the effects of money accretion and of course, money accretion leads to unit buying power loss.
Gab It
