Of Money (4)

Everyone thinks the Federal Reserve printed too much money. I'm saying that's not what happened. Our central bankers restricted the money to fight inflation. They restricted it almost continuously. It was Congress that messed up monetary policy by continuously encouraging the use of credit.

Credit is just as good as money, except it costs a little more to use... And using credit creates debt. Other than that, credit works just like money, and you can go a long time using credit instead of money, and accumulating debt, and embedding extra cost all through the economy. And that's exactly what we did.

And we used credit for money, and it increased demand. And the Federal Reserve saw inflation, and they restricted money further. And Congress saw tight money, and they encouraged additional uses of credit.

And we used credit for money, and it increased costs. And Congress saw weakness in the economy, and encouraged additional uses of credit.

And I said: We have monetary imbalance.