Council of Canadians - credit question

Doug Henwood dhenwood at panix.com
Mon Apr 10 06:58:27 PDT 2000


D.L wrote:


> If not through credit, how does the money supply grow?

Money arises in exchange. Certainly there's an extension of credit involved, but there has to be some real sector involvement or the money is going to be worthless. Central bank extensions of credit without any offsetting expansion in productive capacity will be inflationary. Sometimes that appears as a rising CPI; sometimes as a wacky stockmarket.

Doug



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