Responses to latest Krugman attackSubmitted by nothappy on Sun, 09/16/2012 - 18:10
Paul Krugman has challenged Ron Paul supporters to state whether they think money market funds should be made illegal because they are a de facto form of fractional reserve banking:
"...consider a more recent innovation: money market funds. Such funds are just a particular type of mutual fund — and surely the Austrians don’t want to ban financial intermediation (or do they?). Yet shares in a MMF are very clearly a form of money — you can even write checks on them — created out of thin air by financial institutions, with very few pieces of green paper behind them.
So are such funds illegitimate? What about repo, which has many of the same features?"
Wondering how my fellow DP-ers would respond.