Liberty MavenConfidence Is Leaving the Fiat Money System
October 10th, 2008 9:52 am | by Mike Miller | Published in Bailouts, Banking, Big Government, Debt, Economics, Federal Reserve, Free Market, Liberty, Money, Politics, Taxes, government spending, ludwig von mises, national debt | 0
Today’s article at the Ludwig von Mises Institute discusses the sharp decrease in confidence in our fiat money system:
Were it not for ever-greater increases in central-bank money and the market expectation that governments are about to make taxpayers shoulder commercial banks’ huge losses, the fiat money systems would presumably collapse right away.
International interbank short-term lending rates say it all: the latest drastic increases in yield spreads between money-market rates and official central-bank rates are indicative of the growing reluctance among banks to extend loans to each other, for fear that borrowers could default on their payment obligations…
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