Quote:
Originally Posted by pure_mercury
Also, the major problems we've had are due to crappy loans being offered and accepted, and poor oversight. Those miscues are not endemic to fractional reserve banking.
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Fractional reserve banking, along with the federal reserve, played a large part in expanding the money supply, thus making funds for loans seem more available. However, this money was not backed up by more goods in the economy, it was merely more paper chasing the same amount of goods.