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> Right, because the banking system can always create dollars out of nothing to satisfy any outstanding liabilities. Can they though? Don't they create new lia
by kravvall 4y ago
> Right, because the banking system can always create dollars out of nothing to satisfy any outstanding liabilities.
Can they though? Don't they create new liablities with this? Effectively ending in "finance debt with more debt" scheme that has eventually got to collapse?
- User23 4y agoIt’s a category error to confuse household liabilities with sovereign liabilities. So long as a sovereign currency issuer retains sovereignty it can expand its balance sheet freely. And yes through gross mismanagement it could provoke a revolution and thus lose sovereignty.