Money and Banking

David Brady, Jr. discusses his recent article at mises.org, in which he argues that the newly launched "FedNOW" system isn't a CBDC.

While FedNow seems benign, there is the larger problem of the entire banking system itself being built on a foundation of sand. FedNow can only make that problem worse.

Loan banking versus deposit banking, how deposit banking affects the money supply, and more.

How can a bank “create money out of thin air”? We must enter the magical kingdom of “fractional-reserve banking,” where deposits are turned into loans, loans are turned into money, and so on, to find out.

As government weight in the economy rises faster, technical recessions may not appear in the official data, but citizens suffer it, nevertheless. 

How can a bank “create money out of thin air”? We must enter the magical kingdom of “fractional-reserve banking,” where deposits are turned into loans, loans are turned into money, and so on, to find out.

Why do governments keep pushing CBDCs when voters hate them? Simple: CBDCs are irresistible to governments, who would dearly love to monitor and control every dollar you spend and every word you speak.

Monetarists believe there is an optimum growth rate of money. However, a fiat money system itself is unstable, so there is no optimum growth rate.

The government and its central bank act precisely as would a grand counterfeiter, with very similar social and economic effects.

Monetarists believe there is an optimum growth rate of money. However, a fiat money system itself is unstable, so there is no optimum growth rate.