Wednesday, September 22, 2010
Hang on you cant have deflation in a fiat system… er can you?
"Countless people say that deflation is impossible because the Federal Reserve Bank can just print money to stave off deflation. If the Fedâ€™s main jobs were simply establishing new checking accounts and grinding out banknotes, thatâ€™s what it might do. But in terms of volume, that has not been the Fedâ€™s primary function, which for 89 years has been in fact to foster the expansion of credit. Printed fiat currency depends almost entirely upon the whims of the issuer, but credit is another matter entirely. "