Comment by pjc50
2 hours ago
> The existence of credit itself is what causes monetary instability, and without credit the world would look very different.
Indeed. Credit is money; ultimately anyone can expand the money supply with an IOU.
2 hours ago
> The existence of credit itself is what causes monetary instability, and without credit the world would look very different.
Indeed. Credit is money; ultimately anyone can expand the money supply with an IOU.
Money is destroyed when a loan is paid back. Private credit does not expand the monetary supply permanently. Only the state can increase the money supply.
You are neglecting interest paid. It doesn't matter who issues the credit - the Medici family or the US Federal Reserve.