Saturday, 28 January 2012

Deposit insurance is inflationary in a fiat economy

Deposit insurance is inflationary in a fiat economy where force makes value. It’s not good (for everyone else) if the government will accept worthless bank credit... if money is fiat. Given we accept fiat then banks should not be able to print money... If fiat currencies are fair then deposit insurance is unfair.

If deposit insurance is fair then governments (and fiat currencies) are unfair.

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