On Thursday, October 30, 2003, at 12:26 PM, SnowDog wrote:
So when tallying up "the money supply," I would not count both a gold coin in a vault AND a paper note redeemable for that coin.
That's the difference between M1 and M2 isn't it?
I don't see the analogy with warehouse receipts. M1 itself is a mish-mash created by printing presses and fractional reserve lending; M2 is an additional mish-mash involving short-term money market investments of the aforementioned mish-mash.
Please explain the analogy with warehouse receipts. Is there ANYTHING in the dollar-based modern banking world that functions as a true warehouse receipt? Even a long-term CD is not a warehouse receipt, not by any stretch of the imagination. As far as I can tell, everything at all times and all places involves the leveraged lending or investment of deposited assets. Which is why they call it a "deposit" and not a "bailment."
Please explain.
-- Patrick
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