Fiduciary media
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Fiduciary media consist of the proportion of perfect money substitutes which a bank issues but does not fully back by physical monetary units (i.e. gold or paper money) in their vaults. [1] Fiduciary media can exist in many forms including credit notes, checks or drafts.[2] When a bank increases the amount of fiduciary media in an economy, ceteris paribus, the purchasing power of money will decline.[3]
References
- ↑ Huerta de Soto, Jesus. "Money, Bank Credit, and Economic Cycles", 2006, 187.
- ↑ Schulak EM and Unterkofler H. "The Austrian School of Economics A History of Ideas, Ambassadors and Institutions", 2011.
- ↑ Huerta de Soto, Jesus. "Money, Bank Credit, and Economic Cycles", 2006, 700.
