What's the Problem for the Chartalists? Coffee with Joe, 7-12-11

[rodneyorondeaujr]

Joe,

The only issue I can think of with moving to a full reserve system would be that it caps the amount of investment that can be made at the current level of savings. With the fractional system, investment creates its own money and is not restricted to the level of savings. Definiely something that does not belong in private hands.

[joebhed]

@rodney

This is the most cogent observation of all.

Yes, the level of private savings(plus amassed bank capital, of course) sets the base for the level of lending/investment.

I am not sure it would be inadequate as there is no research evidence that it would be, in terms of the amount.

Both the Fisher approach (100 Percent Money) and the Kucinich Bill provide for supplemental government-provided lending to any bank to meet either locational or real dollar shortfalls.

No problem.

Thanks.