Talk:Real bills doctrine

From Wikipedia, the free encyclopedia

	This article is part of the WikiProject Numismatics, which is an attempt to facilitate the categorization and creation of accurate and formal Numismatism-related articles on Wikipedia. If you would like to participate please visit the project page, where you can join and see a list of open tasks to help with.
???	This article has not yet received a rating on the quality scale.
???	This article has not yet received a rating on the importance scale.

Fixed it best I could. I think it's looking good now. Needs a bit more help with wikification, though. It currently reads like an old ecomomics textbook, however I think the sources are documented well enough. Sim 19:03, 29 April 2006 (UTC)

I'm starting a thorough revision of this page, as part of my slow project to update the Gold Standard and 19th century monetary policy economics pages. The introduction got a first whack, next is the history of the RBD and the bills clearing system of the 19th century. When this is done I will add material at Gold Standard since RBD is relevant to that - I simply have not had time to update this page and wasn't going to link in the condition it was in previously. Stirling Newberry 12:38, 22 August 2006 (UTC)

[edit] Real Bills and Fiat Currency

In a regime not backed by some specific specie, there is no real bills doctrine, because the central bank uses open market operations for its portfolio - that is, it deals in government securities - and alters reserve requirements. Banks can make loans based on anything that they can show bank examiners has a market value. For example the Import-Export Banke makes loans to businesses to buy goods for sale abroad, the collateral being the goods themselves and their expected resale. Central banks don't need to concern themselves with, and neo-classical economic theory suggests that they avoid - purchasing private securities or other privately created instruments. This rule isn't universally adhered to.

There is also no inflationary, or non-inflationary, question being raised by the purchase of private securities or other instruments. If the central bank is allowing the creation of more currency than the economy can support, there is inflation, regardless of what the central bank is exchanging new federal reserve notes, or what banks are lending. The RBD controversy isn't unimportant - there are countries that go on dollar boards for example - and as a proxy fight over monetarism there is some interest, but the reason for the very thin literature on the subject is that it doesn't have general applicability for most currencies. Stirling Newberry 12:20, 29 August 2006 (UTC)