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Politicians realising that money is created out of thin air (either they pass by the banks or not) might create temptations, but is not really related to wheter the money pass by the bank. I would say that it is the constitutional and cultural constraints on how much deficit is accepted that is the real constraint here anyway.

And of course, if you create money and employ otherwise unemployed people that produce something of value, then the pool of goods and services that the money pool is related to also grows.

And also of course, the main source of inflation today appears to be from banks borrowing to private speculation.

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by A swedish kind of death on Fri Nov 25th, 2011 at 07:13:25 AM EST
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