Restructuring the
economy. , v “ Sir, •— Peter Johnson ■ is right. If the people of New
would not be any “econo- ' my” at all and neither of us would be able to debate its restructuring. The ratio of credit to real money is about 9:1. For every dollar note printed will and does support $9 of bank- and other credit. This is because less and less currency is used to “front up” financial transactions. Only small cash purchases require real money. It follows from this that the amount of private . credit which can be created is limited only by the number of transactions which require cash. It could well be that in the future no transactions will require cash. In this case creation of this country’s money supply would be entirely in the hands of private businesses called banks. Yours, etc., , JIM TIMINGS. September 2, 1980.
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Press, 4 September 1980, Page 16
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144Restructuring the Press, 4 September 1980, Page 16
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