Quote Originally Posted by Xmac View Post

Deep down everyone knows that this banking system doesn't lend money it has because there has NEVER been a bank that refuses to lend money to a qualified borrower for lack of current available funds.

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Feel free to ignore this part of his post.

I think the point Xmas was trying to make is that with a more stable amount of currency there is not money being over-created and sloshing around the economy being maki vested in bad investments. Good investments like a school buying their formerly rented property will always find money available to be borrowed for such purpose (assuming, of course, that the school does actually have a reasonable likelihood of being able to repay the loan.). When unlimited quantities of money can be created, as with fractional reserve banking, malinvestment bubbles, like the recent real estate bubble and subsequent crash, are inevitable.