Is your summary of the situation with France hoarding gold and exacerbating (or even launching?) the Great Depression another recommendation to go with "flexible" fiat monies instead of "rigid" commodity varieties?
" If, however, the monetary authority manages to anchor both expectations about a stable output-value of money and expectations about future spending, then you can largely recession-proof your economy. You will still get a business cycle, just a much flatter one than there used to be. This is how Australia avoided the Great Recession and experienced the longest ever-recorded period without a technical recession." Yeah, OZ!! Why can't the rest of us learn from your successes??
Fiat currencies can also fail very badly—see every hyperinflation episode ever.
Bullion standards can clearly work, but not when about 5 institutions (Federal Reserve, Bank of England, Bank of France, Reichsbank, Bank of Japan, maybe Bank of Italy) completely dominate the holdings of the commodity and it only takes one of them to screw up. (I think you can make a reasonable argument that creating the Federal Reserve doomed the gold standard on that basis.)
And yes, folk should learn from Oz, but the Equator is apparently very powerful: it stops many folk taking seriously as a positive example anything that happens South of it.
I have learned a lot from this post and the DeLong article you cited. Thanks. A lot to consider or reconsider vs. my prior views. In particular, I need to sort out the distinction you are making between money and credit, both being available as a means of payment, but not being the same thing "under the covers". ???
Perhaps I should spend more of my IRA "assets" on new cars, vacations, books, etc., rather than let it rot until my grandchildren inherit it. Or spend some of it on more Substack subscriptions, but my personal subjective value assessment is that might not be worth the time/money tradeoff. :-)
"If we do not talk of store of value but instead analyse how money can either be an exchange good or an asset held for future use, we can consider in a more considered way—connected to normal supply and demand—how money functions." Perhaps this is some "theory vs. practice" territory. I have long felt that the MMTers and others don't give the store of value function the attention and merit it deserves. Your viewing it as an asset with supply and demand implications is helpful and interesting, but even held as an asset, it is essentially an abstract surrogate place holder for the value previously created or obtained (with that attendant fragility, etc.). Postponing consumption for saving and investing is usually considered a good personal finance practice, even if the economists might like to see velocity increase. Naturally, today we need to recognize that the current $ values of our investment portfolios include both a real wealth added element and a phony inflation added quantity.
"Inflation and deflation are monetary phenomena, being continuing shifts in the output-value of money. They occur for straightforward supply-and-demand reasons." I fully agree with this, but the "adjustments or distortions" you describe reflect the difficulties of trying to manage an economy where the participants (in the US anyway) make 10 to 30 billion purchasing decisions every day.
Money has a strong element of it works because everyone agrees it works. States have dominated monetary systems not merely because they are the largest economic actor but also because they have much more capacity to support the use of money (by, for instance, paying you in it, and demanding to be paid i it).
But our modern economies are as large and robust (??) as they are because the banks create 90% of the money in circulation?? But the 10% created by the government(s) provides the legal and social foundation for such wide spread use?
I have come to take the rather abstract view that (in the final analysis) money is nothing more (or less) than the social and political AGREEMENT to use a given unit of account in our economic transactions, for the utility that money in general provides. The fact that commodities have been used, and now digital/ virtual data entries fill much of that role, simply shows that the more abstract aspect was what was "truly operational" all along. This invention has proven to be so valuable that we will continue to use it (as you mention) even when it is being devalued, until we finally can no longer accept it and find (or someone arranges) an alternative going forward. Perhaps the digital fiat variety of money is even more open to manipulation and abuse than commodity monies, but if we recognize the core fragility behind its true abstract nature, maybe we can police the players and processes more closely??
"Precisely because money has an economic function, and is an (exchange) good, we cannot expect money to be neutral in its effects on the wider economy. It is not an economic epiphenomenon that can be abstracted away from with no other consequences, at least in the short run." But (at least in the ideal situation) don't we really want the money to be "outside" of the transaction, merely as a transaction enabler and not a true "participant". That is, to retain a stable value relative to the economy as a whole, even if/when prices WRT supply and demand cause selected goods or services to vary ? Clearly not a simple thing to do, especially if we also want some degree of "creative destruction" to advance our quality of life, etc. But even a 2% inflation target ends up reducing our money value (inflation tax) over time. Maybe that is the best we can hope for in reality, so as not to under supply the economy with the money it needs to grow (or not recess/depress).
Your comments about the desires of people to hold or spend money as it increases or decreases in value is something we do need to add to any analysis, but it basically becomes part of the balancing act people should pursue to save and invest enough for their anticipated future, but not so much that we get into the realm of the "paradox of thrift".
Yes, that is why monetary stability is a good thing: precisely because it makes transactions as seamless as possible. That is precisely what a state as fiscally delinquent as Imperial Spain was nevertheless, for centuries, a reliable coiner. It really needed folk to accept its coins as readily as possible.
You have David Graeber’s Debt: The first 5,000 years as a reference but I can’t believe you’ve read it and still not stated that money is loaned into existence, including fiat money.
Because he is wrong. There is nothing “loaned” about a silver coin, or any of the things listed from “Primitive Currency”.
Yes, transferrable IOUs have often been used as payment and that tendency has tended to increase over time: that is what EFTPOS is, for instance. But the later C15th surge in the supply of silver from Central European mines, and from the middle C16th the Americas, was not an increase in loaned things. Increasing use of bills of exchange was such an increase, but the two things are not the same.
The point of money is, and always has been, economising on information and connection. Credit requires more of both than does money. It can, however, both be expanded, and evaporate, more easily.
Go to a “market town” in Britain and you will see a feature that he briefly mentions, a covered area. This was so that the various market participants that had debts against one another, a sum exceeding the local money supply considerably, were able to net off on a particular day (market day) even if it was raining.
His whole point was that writing down a debt became money. Coins != money.
No, credit is a means of payment. Not all means of payment are money. Coins are absolutely money. Graeber is just playing silly word games. The complaints about usury flow from people seeing the difference (and, in Aristotle’s case, also not understanding time preference).
Your discussion of distinguishing between money and credit seems to (sort of?) mirror my idea to consider money in two states: having or not yet having value added to be stored (that store of value functions again). So I call fiat money being created and then loaned but not yet spent as "promise money", where the projection is it will be used to generate value, paying for labor and capital to do so. And once that value has been generated, it becomes "real money" since it now can provide all 3 functions of money. So credit allows the greater expansion of the economy compared to its absence since value [aka wealth] was created using a "no value" entity [bank or perhaps even government money supplied from "thin air"].
"Money is an exchange good, something held to pay for other goods and services. Credit is a promise—one that can be used as payment—that is typically denominated in the medium of account." This suggest we are close, if not yet in total agreement about this idea? :-) I welcome clarification when available.
I have no presumption that any form of money will create value. Money is functional, encouraging transactions, but that is a different matter.
Money is a means of payment, and folk can end up paying for all sorts of things. Yes, there are gains-from-trade, but what folk value can have a huge variety of social consequences. Hamas valued all sorts of things, and spent lots of money on them, but it did not create value for any of their victims, whether Israeli or Palestinian.
Both Hellenistic era and Song Dynasty China had the technology for an industrial take-off, but they did not happen as the former was a slave society and the latter was a bureaucratised autocracy. Neither had the empowered merchants that produces industrial take-off commerce. Fiat money is used in countries with wildly differing tendencies to create value.
It is very tempting to build the presumptions of one’s own society into one’s analysis. I try to avoid that by reading a lot of history and evolutionary anthropology.
I hope it was clear I meant the value in goods and services created or performed as part of the transaction, which is then "stored" in the money for future use. The prospect of receiving money incentivized the supplier to create that value, and then that created value was exchanged for the value already in the "real" money or added to the (credit or promise) money [just?] prior to its exchange. The money as an abstract agreement did not of itself create any value.
On Hamas, of course perpetrating violence or death on someone is not an economic transaction and thus the value stored in money is not involved, whatever other values or results may be being sought.
"... tempting to build the presumptions of one’s own society into one’s analysis." Probably guilty as charged, which is part of the reason I follow you, to gain from your wider exposure and insights. :-)
"That money can be an asset, can be held for future use, means that Say’s Law—production creates demand—does not work across a single time period." [Hopefully I will find time to examine your DeLong reference, but pending that ... ] my understanding of Say vs. production was that he meant before you had the money/value to buy something from someone else [i.e., achieve economic demand rather than mere personal desire], you had to create/ produce something of value to exchange, with or without money as a surrogate intermediary. (Borrowing works, too, of course.)
"Another way to think of recessions and depressions is a significant, sustained, fall in transactions." And fully complementary to the adage that a recession is when your neighbor loses his job, and a depression is when you lose yours.
"... money is typically a medium of account. Indeed, that is the best test of whether something is money: if it is an exchange good used as a medium of account, it is unambiguously money." But does this not also apply to the abstract digital/virtual mode of accounting for the abstract unit of account? So once again, it is the agreement to use that form of unit that makes it money, too. And in fact, if people had concerns about a particular (actually solvent) bank being "short of funds", if they merely insisted that the bank electronically transfer their accounting unit numbers to another bank, without demanding cash, then there would be no run on the back. Isn't that essentially what the bank insurance process does, too?
A bank without deposits could not loan money. It needs the liabilities in order to generate the assets it profits from. Deposit insurance does guarantee that the bank can cover its liabilities.
Today I read the DeLong essay you cited. Very interesting and somewhat persuasive that money (and credit?) is also a commodity within the economy, at least at a macro view; and thus perhaps not just the abstract "watcher/enabler" of transactions as I had come to view it. And that governments might have a role to help adjust the impacts of up and down business cycles. Perhaps that role should be well defined and limited as much as possible?
While copying the DeLong article to MS Word, I also found you had addressed some of this in 2013; although I have not yet reread the Skeptical Lawyer post:
Steve Horwitz explaining Say’s Law of Markets and production, so as to avoid misunderstandings
Understanding Say's Law of Markets: Beware measures to boost aggregate demand.
JANUARY 01, 1997 by STEVEN HORWITZ
I also found it interesting that the DeLong item mentions "... those liquid assets generally accepted as means of payment that people hold in their portfolios to grease their market transactions ...", thus using "liquid assets" as an economic lubricant and not an economic fuel, in line with my views on the matter.
I fear I still fail to really understand double entry bookkeeping, but if liabilities and assets are two sides of the same "thing", then are you saying that sometimes the liabilities are created "out of thin air" so they can be moved into a borrower's account as their asset? But from my abstract view, this asset does not contain "value" until it is spent on real goods and services. [with caveat about comment above on DeLong essay.]
If I didn't already know this about the three functions of money, "being a medium of exchange, a unit of account, a store of value", then I would have learned them from your earlier essays? Has your personal thinking or understanding matured and become more sophisticated over the last 15 years?
" Money minimises the required information. You do not have to search for something specific the other transactor wants, you just pay in money." Even if you do not have to know much about the person with whom you are transacting, you still have to be aware of the information related to the sovereign issuer of that money, to gage its validity and reliability for a present or future transaction. Plus some awareness of the relative market price/value of what you want vs. what is on offer from the other party. Isn't that the core meaning behind Gilder and Hayek discussing information and money?
Another great entertaining and intellectually demanding post. I have respected your economic knowledge since I first saw some of your essays in that direction in the 2010 or so timeframe. Thus, when I am poking back as a few things below, it may be merely a need for clarification of language, but we might have a core difference of opinion, in the abstract. But even that may be part of "In theory, theory and practice are the same. In practice, they are not". [Snopes says Yogi Berra was not the source of this quote often attributed to him, but some software expert in the 1964 timeframe.]
The other day I also found this Substack posting on a money related explication that you and others here may find useful or entertaining.
Is your summary of the situation with France hoarding gold and exacerbating (or even launching?) the Great Depression another recommendation to go with "flexible" fiat monies instead of "rigid" commodity varieties?
" If, however, the monetary authority manages to anchor both expectations about a stable output-value of money and expectations about future spending, then you can largely recession-proof your economy. You will still get a business cycle, just a much flatter one than there used to be. This is how Australia avoided the Great Recession and experienced the longest ever-recorded period without a technical recession." Yeah, OZ!! Why can't the rest of us learn from your successes??
Fiat currencies can also fail very badly—see every hyperinflation episode ever.
Bullion standards can clearly work, but not when about 5 institutions (Federal Reserve, Bank of England, Bank of France, Reichsbank, Bank of Japan, maybe Bank of Italy) completely dominate the holdings of the commodity and it only takes one of them to screw up. (I think you can make a reasonable argument that creating the Federal Reserve doomed the gold standard on that basis.)
And yes, folk should learn from Oz, but the Equator is apparently very powerful: it stops many folk taking seriously as a positive example anything that happens South of it.
I have learned a lot from this post and the DeLong article you cited. Thanks. A lot to consider or reconsider vs. my prior views. In particular, I need to sort out the distinction you are making between money and credit, both being available as a means of payment, but not being the same thing "under the covers". ???
Perhaps I should spend more of my IRA "assets" on new cars, vacations, books, etc., rather than let it rot until my grandchildren inherit it. Or spend some of it on more Substack subscriptions, but my personal subjective value assessment is that might not be worth the time/money tradeoff. :-)
"If we do not talk of store of value but instead analyse how money can either be an exchange good or an asset held for future use, we can consider in a more considered way—connected to normal supply and demand—how money functions." Perhaps this is some "theory vs. practice" territory. I have long felt that the MMTers and others don't give the store of value function the attention and merit it deserves. Your viewing it as an asset with supply and demand implications is helpful and interesting, but even held as an asset, it is essentially an abstract surrogate place holder for the value previously created or obtained (with that attendant fragility, etc.). Postponing consumption for saving and investing is usually considered a good personal finance practice, even if the economists might like to see velocity increase. Naturally, today we need to recognize that the current $ values of our investment portfolios include both a real wealth added element and a phony inflation added quantity.
"Inflation and deflation are monetary phenomena, being continuing shifts in the output-value of money. They occur for straightforward supply-and-demand reasons." I fully agree with this, but the "adjustments or distortions" you describe reflect the difficulties of trying to manage an economy where the participants (in the US anyway) make 10 to 30 billion purchasing decisions every day.
Money has a strong element of it works because everyone agrees it works. States have dominated monetary systems not merely because they are the largest economic actor but also because they have much more capacity to support the use of money (by, for instance, paying you in it, and demanding to be paid i it).
But our modern economies are as large and robust (??) as they are because the banks create 90% of the money in circulation?? But the 10% created by the government(s) provides the legal and social foundation for such wide spread use?
I have come to take the rather abstract view that (in the final analysis) money is nothing more (or less) than the social and political AGREEMENT to use a given unit of account in our economic transactions, for the utility that money in general provides. The fact that commodities have been used, and now digital/ virtual data entries fill much of that role, simply shows that the more abstract aspect was what was "truly operational" all along. This invention has proven to be so valuable that we will continue to use it (as you mention) even when it is being devalued, until we finally can no longer accept it and find (or someone arranges) an alternative going forward. Perhaps the digital fiat variety of money is even more open to manipulation and abuse than commodity monies, but if we recognize the core fragility behind its true abstract nature, maybe we can police the players and processes more closely??
"Precisely because money has an economic function, and is an (exchange) good, we cannot expect money to be neutral in its effects on the wider economy. It is not an economic epiphenomenon that can be abstracted away from with no other consequences, at least in the short run." But (at least in the ideal situation) don't we really want the money to be "outside" of the transaction, merely as a transaction enabler and not a true "participant". That is, to retain a stable value relative to the economy as a whole, even if/when prices WRT supply and demand cause selected goods or services to vary ? Clearly not a simple thing to do, especially if we also want some degree of "creative destruction" to advance our quality of life, etc. But even a 2% inflation target ends up reducing our money value (inflation tax) over time. Maybe that is the best we can hope for in reality, so as not to under supply the economy with the money it needs to grow (or not recess/depress).
Your comments about the desires of people to hold or spend money as it increases or decreases in value is something we do need to add to any analysis, but it basically becomes part of the balancing act people should pursue to save and invest enough for their anticipated future, but not so much that we get into the realm of the "paradox of thrift".
Yes, that is why monetary stability is a good thing: precisely because it makes transactions as seamless as possible. That is precisely what a state as fiscally delinquent as Imperial Spain was nevertheless, for centuries, a reliable coiner. It really needed folk to accept its coins as readily as possible.
A decade ago I wrote this to explain the basics of money - https://accordingtohoyt.com/2014/12/30/something-about-money-and-cake-francis-turner/
I've had people say they enjoyed it a lot, but this post is far more comprehensive
I do find currency fascinating, as you know.
Energy money is the way out.
Make problems 3 axis not 3 body problem - align the axises and unity not division with Energy money, the KwH dollar. E$
- [ ] Time to take the petrodollar to the next step
- [ ] Some write of 3 body problem in America, the West. Insoluble.
- [ ] Not 3 body problem but 3 axis X Y , but Z is solution, Z is energy money, align interests not oppose them
- [ ] Establishment problem is its established , it cannot un establish , it sees 💀
- [ ] At present 💀 is quite possible
- [ ] We Need more work
- [ ] We need to inflate $ and bend the energy cost curve down = Energy money
- [ ] Energy money 💰 aligns interests of all = unity
- [ ] E$ harnesses man’s desire for improvement, gently
- [ ] Not so gently E$ harnesses avarice , great and small.
- [ ] We Need more $ to pay off incredible debts.
You have David Graeber’s Debt: The first 5,000 years as a reference but I can’t believe you’ve read it and still not stated that money is loaned into existence, including fiat money.
Because he is wrong. There is nothing “loaned” about a silver coin, or any of the things listed from “Primitive Currency”.
Yes, transferrable IOUs have often been used as payment and that tendency has tended to increase over time: that is what EFTPOS is, for instance. But the later C15th surge in the supply of silver from Central European mines, and from the middle C16th the Americas, was not an increase in loaned things. Increasing use of bills of exchange was such an increase, but the two things are not the same.
The point of money is, and always has been, economising on information and connection. Credit requires more of both than does money. It can, however, both be expanded, and evaporate, more easily.
Go to a “market town” in Britain and you will see a feature that he briefly mentions, a covered area. This was so that the various market participants that had debts against one another, a sum exceeding the local money supply considerably, were able to net off on a particular day (market day) even if it was raining.
His whole point was that writing down a debt became money. Coins != money.
No, credit is a means of payment. Not all means of payment are money. Coins are absolutely money. Graeber is just playing silly word games. The complaints about usury flow from people seeing the difference (and, in Aristotle’s case, also not understanding time preference).
If someone doesn’t under stand the time value of money, you should borrow some money from them, that will sort them out.
Your discussion of distinguishing between money and credit seems to (sort of?) mirror my idea to consider money in two states: having or not yet having value added to be stored (that store of value functions again). So I call fiat money being created and then loaned but not yet spent as "promise money", where the projection is it will be used to generate value, paying for labor and capital to do so. And once that value has been generated, it becomes "real money" since it now can provide all 3 functions of money. So credit allows the greater expansion of the economy compared to its absence since value [aka wealth] was created using a "no value" entity [bank or perhaps even government money supplied from "thin air"].
"Money is an exchange good, something held to pay for other goods and services. Credit is a promise—one that can be used as payment—that is typically denominated in the medium of account." This suggest we are close, if not yet in total agreement about this idea? :-) I welcome clarification when available.
I have no presumption that any form of money will create value. Money is functional, encouraging transactions, but that is a different matter.
Money is a means of payment, and folk can end up paying for all sorts of things. Yes, there are gains-from-trade, but what folk value can have a huge variety of social consequences. Hamas valued all sorts of things, and spent lots of money on them, but it did not create value for any of their victims, whether Israeli or Palestinian.
Both Hellenistic era and Song Dynasty China had the technology for an industrial take-off, but they did not happen as the former was a slave society and the latter was a bureaucratised autocracy. Neither had the empowered merchants that produces industrial take-off commerce. Fiat money is used in countries with wildly differing tendencies to create value.
It is very tempting to build the presumptions of one’s own society into one’s analysis. I try to avoid that by reading a lot of history and evolutionary anthropology.
I hope it was clear I meant the value in goods and services created or performed as part of the transaction, which is then "stored" in the money for future use. The prospect of receiving money incentivized the supplier to create that value, and then that created value was exchanged for the value already in the "real" money or added to the (credit or promise) money [just?] prior to its exchange. The money as an abstract agreement did not of itself create any value.
On Hamas, of course perpetrating violence or death on someone is not an economic transaction and thus the value stored in money is not involved, whatever other values or results may be being sought.
"... tempting to build the presumptions of one’s own society into one’s analysis." Probably guilty as charged, which is part of the reason I follow you, to gain from your wider exposure and insights. :-)
"That money can be an asset, can be held for future use, means that Say’s Law—production creates demand—does not work across a single time period." [Hopefully I will find time to examine your DeLong reference, but pending that ... ] my understanding of Say vs. production was that he meant before you had the money/value to buy something from someone else [i.e., achieve economic demand rather than mere personal desire], you had to create/ produce something of value to exchange, with or without money as a surrogate intermediary. (Borrowing works, too, of course.)
"Another way to think of recessions and depressions is a significant, sustained, fall in transactions." And fully complementary to the adage that a recession is when your neighbor loses his job, and a depression is when you lose yours.
"... money is typically a medium of account. Indeed, that is the best test of whether something is money: if it is an exchange good used as a medium of account, it is unambiguously money." But does this not also apply to the abstract digital/virtual mode of accounting for the abstract unit of account? So once again, it is the agreement to use that form of unit that makes it money, too. And in fact, if people had concerns about a particular (actually solvent) bank being "short of funds", if they merely insisted that the bank electronically transfer their accounting unit numbers to another bank, without demanding cash, then there would be no run on the back. Isn't that essentially what the bank insurance process does, too?
A bank without deposits could not loan money. It needs the liabilities in order to generate the assets it profits from. Deposit insurance does guarantee that the bank can cover its liabilities.
Today I read the DeLong essay you cited. Very interesting and somewhat persuasive that money (and credit?) is also a commodity within the economy, at least at a macro view; and thus perhaps not just the abstract "watcher/enabler" of transactions as I had come to view it. And that governments might have a role to help adjust the impacts of up and down business cycles. Perhaps that role should be well defined and limited as much as possible?
While copying the DeLong article to MS Word, I also found you had addressed some of this in 2013; although I have not yet reread the Skeptical Lawyer post:
Steve Horwitz explaining Say’s Law of Markets and production, so as to avoid misunderstandings
http://www.fee.org/the_freeman/detail/understanding-says-law-of-markets#axzz2R2f2ts3h
[This item was found via the first commenter in Lorenzo’s essay here: http://skepticlawyer.com.au/2013/03/29/the-real-convenience-of-money/ ]
Understanding Say's Law of Markets: Beware measures to boost aggregate demand.
JANUARY 01, 1997 by STEVEN HORWITZ
I also found it interesting that the DeLong item mentions "... those liquid assets generally accepted as means of payment that people hold in their portfolios to grease their market transactions ...", thus using "liquid assets" as an economic lubricant and not an economic fuel, in line with my views on the matter.
I fear I still fail to really understand double entry bookkeeping, but if liabilities and assets are two sides of the same "thing", then are you saying that sometimes the liabilities are created "out of thin air" so they can be moved into a borrower's account as their asset? But from my abstract view, this asset does not contain "value" until it is spent on real goods and services. [with caveat about comment above on DeLong essay.]
If I didn't already know this about the three functions of money, "being a medium of exchange, a unit of account, a store of value", then I would have learned them from your earlier essays? Has your personal thinking or understanding matured and become more sophisticated over the last 15 years?
" Money minimises the required information. You do not have to search for something specific the other transactor wants, you just pay in money." Even if you do not have to know much about the person with whom you are transacting, you still have to be aware of the information related to the sovereign issuer of that money, to gage its validity and reliability for a present or future transaction. Plus some awareness of the relative market price/value of what you want vs. what is on offer from the other party. Isn't that the core meaning behind Gilder and Hayek discussing information and money?
My thinking has become more worked out.
As for confidence in a money, that is still a lot less required information that individual information about the many folk you transact with.
Another great entertaining and intellectually demanding post. I have respected your economic knowledge since I first saw some of your essays in that direction in the 2010 or so timeframe. Thus, when I am poking back as a few things below, it may be merely a need for clarification of language, but we might have a core difference of opinion, in the abstract. But even that may be part of "In theory, theory and practice are the same. In practice, they are not". [Snopes says Yogi Berra was not the source of this quote often attributed to him, but some software expert in the 1964 timeframe.]
The other day I also found this Substack posting on a money related explication that you and others here may find useful or entertaining.
https://treeofwoe.substack.com/p/social-credit-and-monetary-circuit?utm_source=post-email-title&publication_id=99806&post_id=149507463&utm_campaign=email-post-title&isFreemail=true&r=984m0&triedRedirect=true&utm_medium=email
Yes, that post is on my to-read list.
Yes, please let us know what you think of it. :-)
Nicely explained. I disagree with treating the expansion of credit by banks as expanding money, rather than as expanding means of payment.
Energy money is the answer.
A solution not Critique.