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by mattmerc
1264 days ago
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I definitely have no idea what "free market banking" is. Though, I think your statement is contradictory. Central banks control their money supply, and thus they are in direct control of the S in S&D. So I am not sure what it means to say that they don't think interest rates are subject to S&D. I am quite certain they have an accurate high level understanding of the relationship between their supply, interest rates and inflation. I would also like to point out that there are different types of interest rates. I am not sure what rates you suggest would be set by S&D. |
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Free market banking is banking in which any bank can issue money. The "supply" they were referring to is supply in the economic sense of supply and demand, i.e. the equilibrium market price of money/debt that would arise from the supply and demand of market participants.
If one farm had a legal monopoly on selling apples, them yes technically they are "supplying" them, but the price is not what the natural price of apples would be in a competitive market absent any legislatively granted monopolies.