Money and Banking

As the credit expansion turns to bust, many capital goods remain unused, many investment processes cannot be completed, and capital goods produced are used in a manner not originally foreseen. A large portion of society’s scarce resources has been squandered.

Scratching beneath the surface of the debate around countercyclical capital buffers, we find the normal level of duplicity that characterizes most debates about monetary policy.

Selgin thinks fractional reserve banking critics are akin to "flat-earthers", but he gets some important points wrong. 

It is impossible to force the economic development of society by artificially encouraging investment and initially financing it with credit expansion.  This policy can only have benefits if economic actors also elect to begin saving more at the same time.