Troy Guffey (troyguffey) wrote,
Troy Guffey

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Floating Money

Someone on one of my lists (a Harry Potter fanfic list!) said:
> And the loans don't have to be long. Checkout slide 5 in
> <>
> for a graph of the overnight loans that banks give to each other.
Someone else said:
Ahh, yes, the tricks banks use to inflate the money supply far and away
over the amounts the Fed has ever printed.

I do wonder, sometimes, if the economy was frozen and all of the AR and
AP were cleared out, loans paid off and balances settled up, and the
bankruptcies settled out, what percentage of the claimed money supply
would actually still exist. I'm betting less that 1/10th of one percent
- all the rest is various forms of float, I believe.
Tags: money, politics
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