In a free market with sound money, capital owners choose to allocate their capital to the investments they find most productive, and can utilize investment banks to manage this allocation process. The process rewards firms that serve customers successfully, and the investors who identify them, while punishing mistakes. In a fiat monetary system, however, the central bank is de facto responsible for the entirety of the credit allocation process. It controls and supervises the banks that allocate capital, sets the lending eligibility criteria, and attempts to quantify risks in a mathematical
...more
Sustainability
