The "What is Money?" Show cover image

"Money: Free and Unfree" with George Selgin (WiM209)

The "What is Money?" Show

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Getting Away With Fractional Reserves

When you start depending on promises to gold rather than possession or custody of gold, the system becomes a lot more levered. It's becoming more fragilized as it becomes more centralized. At some point, the trade between risk and saving on gold, or economizing on gold, they went way overboard in what was a worth while trade off. And the cost of that was an international financial crisis and depression.

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