By jim

Using money as a store of value is inherently problematic. One can store value as canned beans, as rice, but as money?

The usual trick to this is to lend money to young people to build homes and start families. The value is stored in their home, the bank holds a lot of mortgages to these homes, and these back a lot of on demand deposits.

This creates the notorious problem of term transformation, which can be ameliorated by flexible interest rate mortgages – or by an alarming willingness of the government to print money for cronies, but I am