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The government could keep currency stable by simply not permitting more to be created. Done. That's not the intention. The intention is to make sure the banks c
by jswinghammer 13y ago
The government could keep currency stable by simply not permitting more to be created. Done. That's not the intention. The intention is to make sure the banks can loan out as much as they want when they want and then get bailed out when crashes occur.
- jude- 13y agoNot true. If the amount of money in circulation was fixed, the fluctuating demand for it would cause its value (i.e. what goods/services it will purchase) will fluctuate with it.
- jswinghammer 13y agoIt does that anyway. The currency itself would be stable and there would be no guessing games about what was going on with monetary policy since there would be no policy to discuss.
- dragonwriter 13y ago> The government could keep currency stable by simply not permitting more to be created. That would keep one measure of money supply stable. It wouldn't keep the value of the dollar stable, though.