Criticism of fractional-reserve banking
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Debt-based monetary system is a political term used by critics of the Federal Reserve, based upon heterodox economics, such as that of the Austrian school. The term is not in use among economists.
An Explanation of the Term
The term implies that the Federal Reserve and its member banks steal wealth from the public through printing money which is then loaned to the public at interest (see New World Order (conspiracy theory)). The term is based largely upon the heterodox economics of the Austrian school. Some invoke the Austrian Business Cycle Theory[1] to argue that the business cycle is caused by artificial government expansions and contractions of the money supply. [2] The usage of the word "debt" may be misleading, as the term is used to describe an overall loss in public wealth stemming from over-expansion of the money supply (see inflation). This is distinguished from all forms of debt, including public debt.
See also
References
- ^ Rothbard, Murray (1980). What Has Government Done to Our Money?.
- ^ Grignon, Paul. "Money as Debt". Retrieved December 29, 2007.