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Reviewer Comment:
Dr. Pollett points out that the current boom is built mostly on credit. Yes,
the government is exchanging mostly credit rather than currency for what it
receives plus what it gives to its pensioners and to its voter supporters in
welfare. The process is through the FED and commercial banking system which
then expand the volume of money in the market by making loans. He writes:
"The artificial increase in the supply of credit pushes market interest
rates downwards - that is, below the levels that would prevail had there been
no artificial increase in bank credit supply." He supplies excellent
graphs to illustrate the financial results.
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