Thursday, 25 October 2012

By definition banks are part of the government

The definition of a bank is a government agency which has the ability to (cause inflation and) increase the money supply. If the government decides to abandon deposit insurance (and thereby abandon banks) then the definition will change... but until that point banks are (by definition) part of the government. Banks are by definition inflationary... or at least they have the ability to cause inflation even if they do not always choose to do so.

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