“Thus, our national circulating medium is now at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess.”

right on accurate

Humans are slow learners. "Money" isn't always money and doesn't always equal wealth. The people of Zimbabwe have lots of "money." Throw a little fractional reserve banking into the cauldron and you have a witch's brew that will turn a princely economy into a toad.

Well said Bryan.

As a follow up to Bryans' comment that money doesn't always equal wealth. In Germany before the 2nd world war, there was a story of someone with a basket of money hurrying to buy a loaf of bread.When the basket was set down for a moment, someone stole the basket and left the money.The basket had Intrinsic value but due to rampant inflation at that time, the money had almost no value at all. I fear that we are headed in that direction and Nancy and the gang will move us right along.

Prices in a free economy and society are seldom static. Human nature says that the vaule of something goes up as soon as one posesses it, thus few sell their homes for what they paid for them, especially in the high turn over metro areas. One thing worse than inflation is deflation, when you buy something and the next day it is worth less than you paid for. With anticipated price deflation normal folks will wait to buy sometime in the future and thus the longer they wait the more the economy goes south. With anticipated price inflation folks buy regularly or stock pile to beat tommorrows price. Rampant run away inflation must be avoided but normal inflation is a must for a healthy economy.

"Prices in a free economy are seldom static." I found a grain of truth! But then we get, "One thing worse than inflation is deflation, when you buy something and the next day it is worth less than you paid for." This, as Comrade Waffler would say, is BS. It's the same equation turned on its head as saying, ' One thing worse that deflation is inflation, when you get your paycheck and the next day it buys less goods and services than you worked for.' Whether deflation, [sic] is good or bad is irrelevant. It is the natural and inevitable correction to an increase in the supply of money. It is also important to keep in mind that inflation is defined as an increase in the supply of money. It is NOT a general increase in prices. The general increase in prices is a symptom of inflation. By that same token, deflation is a contraction of the money supply, not a decrease in prices. And, yes. It does make a difference whether you understand it or not.

One must define ones terms. Inflation is generally used to refer to "the general price level' the cost of the "basket of goods". We have recent sharp rises in food costs along with oil costs, that is the inflation that economists talk about, There may be a point the other way also, during the California Gold Rush every time someone found another mine or filed another claim the price of an egg would jump up another dollar or two. A good argument for those who think the price of anything is static in relation to gold. With the knowledge and analytical abilities of those who call me comrade I feel sad that the socialists might acutal take over. You guys really do have to do better.

Waffler, you should think before you write. You just proved Bryan's definitions.

Absolutely true! If Waffler fears deflation, then we should not use currency that can be expanded and contracted at will by the central banks. Inflation is NOT healthy for an economy. With inflation, prices go up, but not the value. Your dollar saved is now worth less than before! The only thing inflation is good for is borrowing more money since paying it back means using dollars that are worth less to pay back something that was worth more. An increase in prices is not an increase in value, just as the decrease in prices is not a decrease in value. Sheesh! What is wrong with food, energy, and housing costing less??! Only those vested in a debt economy become losers with deflation, the savers benefit. The reason prices go down during deflation is because your money's value is rising! Hello! "Neither a borrower nor a lender be."