tag:blogger.com,1999:blog-2761684730989137546.post361788172399807418..comments2024-03-28T07:50:06.102-04:00Comments on Mike Norman Economics: Graham Barnes — Ideologies of credit creationmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2761684730989137546.post-50258524515614538182018-11-26T18:54:59.606-05:002018-11-26T18:54:59.606-05:00This is so frustrating. How do people think it wo...This is so frustrating. How do people think it works now? Sometimes I think fewer and fewer people are actually involved in business and creating things for other people. Credit creation is MOSTLY local already. The handshake and purchase agreement are the foundational instrument of credit in our economy. They lie completely outside the banking system for extended periods of time and only after delivery of real goods even show up as a blip in the formal financial system. I'd guess these formal and informal credit arrangements dwarf the size of the entire commercial and industrial banking system. Of course bank accounts, letters of credit, credit cards and other types of spending are important too, but they have such high costs and cumbersome requirements that often it is easier and cheaper to extend credit directly in a supply chain and periodically settle up between customers and vendors. I guess consumers don't see it anymore, maybe that is why academics and government people seem blind in their prose.Ryan Harrishttps://www.blogger.com/profile/04815033054435303399noreply@blogger.com