"The problem with our modern infrastructure – unlimited fiat money, lender-of-last-resort central banks, deposit insurance, extensive bank regulation – is that it encourages (and is designed to encourage) bank credit creation and thus lending and investment on a scale that is entirely unrelated to the propensity of the public to save. Interest rates, which are the essential coordinating element between saving and investment, are systematically corrupted. This explains persistent capital misallocation and thus the occurrence of crises."Detlev Schlichter commenting in response to the aptly-named "Andrew Jackson" (very droll!) who seems to have some association with the "Positive Money" proposal recently submitted by a group of Southampton University academics to the UK government's Independent Commission on Banking. The proposal aims to do away with fractional reserve banking but not the central bank from which the funny money is issued in the first place. Instead, the academics propose... another State sponsored agency tasked with regulating the supply of money to meet demand.
The penny still hasn't dropped.
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