Would you lend money to a friend if you thought that there was a good chance that you'd not get all of your money back? Good friends might make such loans in spite of the lousy prospects for repayment. But what about bankers? Should bankers lend to people in an economic environment in which the repayment dollars will almost certainly be worth less than the lent-out dollars? There is another way to ask the question. When the President of the United States keeps calling for more lending, should lenders lend even knowing that the policies of this same president and the president's Fed Chief will turn the loans into losing transactions? At TheFremanOnline.org, Richard Fulmer writes: A lender would hardly agree to make a $100 loan unless he could reasonably expect to get at least $100 in purchasing power in return. If the government is debasing the currency, loans will be made only if interest rates are higher than the anticipated rate of inflation. Fulmer has nailed a fundamental...(Read Full Post)