Thursday, 26 July 2012

Fractional reserve banking is like diluting shares

There is nothing wrong with the government or the central bank (and member banks) extending their balance sheets by practicing qe... and by extension frb. To do this is not offensive because no one owns the balance sheet of the government (it is a private firm) and our only complaint is that of a shareholder complaining about a share dilution... frb is not aggressive and so we have nothing to complain about.

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