Mises Daily
Author:
Philipp Bagus
Online Publish Date:
by 100 percent, the average quality of base money falls. After these expansionary policies, only 10 percent of base money is backed by gold and 90 percent is backed by expand credit to the extent that the risk of bankruptcy is reasonably avoided. Competition forces them to check their credit expansion. The question now concerns an independent and uncoordinated credit expansion. As a result, banks set a common policy of simultaneous credit expansion. These policies permit them to remain