Circulation credit

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Circulation credit is credit extended by banks in the form of banknotes or demand deposits especially created for this purpose; as opposed to credit granted by the loan of a bank's own funds, or funds deposited with it by its customers. The extension of circulation credit makes available to borrowers newly created funds which do not decrease or restrict the funds available to anyone else as in the case of commodity credit.[1]


  1. Percy L. Greaves, Jr. "Mises Made Easier ", 1974. Referenced 2014-06-29.