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Thank you for the reply. I don't believe I took the quote out of context, as I wrote what Friedman said, almost verbatim without commentary. The monetary base i
by bdcs 13y ago
Thank you for the reply. I don't believe I took the quote out of context, as I wrote what Friedman said, almost verbatim without commentary. The monetary base is the stuff consumers touch because -- literally -- if you're touching it, then it is monetary base (cash, etc).
> there is no fractional reserve banking in Bitcoins (or at least I'm not clear how you'd build fractional reserve banking on top of Bitcoins).
Fractional reserve banking with bitcoins works exactly the same as it does with anything else (modern USD, USD 110 years ago [gold-backed], etc.)
Friedman explicitly says, keep the amount of currency constant, and use fractional reserve to increase the amount of monetary supply, as needed for expansion. We can do exactly this with bitcoin. Do you disagree?
- apu 13y agoI don't believe I took the quote out of context, as I wrote what Friedman said, almost verbatim without commentary. "Out of context" means you omitted other text that changes the meaning of the text you did quote. See rayiner's comment about this (the very next paragraph...) The monetary base is the stuff consumers touch No, it is not. See the wikipedia link and Rayiner's comment, which explicitly refutes this (The monetary base must not be confused with the money supply which consists of currency circulating in the public) It is hard to take your arguments on good-faith if you make such blatantly false statements.
- bdcs 13y agoMilton Friedman meant monetary base, in your nomenclature. From Wikipedia's "Money Supply" article: "MB: is referred to as the monetary base or total currency. This is the base from which other forms of money (like checking deposits, listed below) are created and is traditionally the most liquid measure of the money supply." Please reread that last sentence before replying.