Also, the central bank and the (fractional reserve) banking system would face a nearly irresistible temptation to use their ability to create money to hold the deflation at bay as long as possible.

FORBES: Stop The Madness: Make The Dollar As Good As Gold

It's a fractional reserve system with no reserve requirements and no central bank control.

FORBES: Sound Advice Worth Repeating

Many of us learned in economics 101 that banks create money by depositing the proceeds of a loan in the borrower's checking account, but the total money created is controlled by central banks through the minimal reserves that banks must maintain with them, the fractional reserve system.

FORBES: Magazine Article

Despite several rate cuts by the Federal Reserve, and additional efforts by the central bank to pump cash into the banking system to ease the credit crunch, banks are still finding the need to raise additional capital by either slashing their dividend, as National City Corp. did last week, or selling stakes to outside investors.

FORBES: Magazine Article

Despite several rate cuts by the Federal Reserve, and additional efforts by the central bank to pump cash into the banking system to ease the credit crunch, banks are still finding the need to raise additional capital by either slashing their dividend, as National City Corp. (nyse: NCC - news - people ) did last week, or selling stakes to outside investors.

FORBES: Cayne Quits As Bear Stearns CEO

In the U.S., you see, there was a Sovereign debtor and a central bank, the Federal Reserve, that together staved off the crisis by pouring trillions in the financial system here and in Europe.

FORBES: The European Bank Crisis of 2011 Is Worse Than The 2008 US Bank Crisis