Debt based money: The big elephant

Is Our Money Based on Debt?

Mises Daily: Monday, August 16, 2010 by Robert P. Murphy
http://mises.org/daily/4631

Debt based money: The elephant few discuss…

Different groups often notice different aspects of the same phenomenon — this is the point of the famous tale of the blind men encountering an elephant. When it comes to the Federal Reserve, Austrians usually focus on how its tinkering with interest rates leads to the boom–bust cycle.

However, plenty of non-Austrians hate the Federal Reserve System too. For some of these critics, one of the most perverse features of our present monetary system is its basis in debt. Specifically, if Americans ever began seriously paying down their debts, the supply of dollars would shrink. In the present article I’ll explain this strange fact.

The Connection Between Debt and Money under Fractional-Reserve Banking

Please click the link to see the complete article.
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About ace5ace

60, roaming the Ozarks.
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