From: "David E. Smith" <dsmith@midwest.net>
Date: Sat, 13 Apr 1996 22:45:58 +0800
To: perry@piermont.com
Subject: Re: Money supply is fake anyway
Message-ID: <199604112204.RAA22999@cdale1.midwest.net>
MIME-Version: 1.0
Content-Type: text/plain


> > Banks "invent" money on a daily basis.
> 
> Really? Since when?
> 

That's something from college-level economics.  If a bank
has reserves in excess of their reserve requirement, they
can loan out the excess, several times, gambling that they
won't be made to provide all of that alleged money in a
more negotiable (outside of the bank system) form, like
cash.

As I understand it, that's where a lot of the 80s Savings & Loan
problems came from - too many people wanted their 'money'
in a more negotiable form too quickly, and they had
to fold.  (OTOH, it's been a long time since I took that
college-level economics course.)

dave


--- David Smith, Intellectual Terrorist
http://www.midwest.net/scribers/dsmith/