I got this commentary off a very bearish USD blog...
QuoteDislikedAlan Greenspan -- and to a considerable extent his replacement Bernard Bernecke -- are "Milton Friedman School" boys. That's not just about being "Free Marketeers." Friedmanism includes policies to deal with economic crises just like every other economic school of models. But that also means that Friedman's remedies are still along free market theory lines. The good Doctor may have championed FDR's "modified" Keynesianism (deficit-spending 'bottom-up' economic growth) during FDR's Administration but the blood had stopped going to Milton's head by the early 1960s. [When Greenspan went to Friedman's School in Chicago.] Friedman wound up teaching that past economic crises in America laid at the feet of the -- get this -- the failure of America's central banks (after 1915 this meant the Fed) to keep supplying cheap dollars.
Basically, what this means is that during economic panics banks stop converting depositor's accounts into dollars. This seems paradoxical but in the long run banks hang on to their money and thus we know at least where the money is. REALLY! I'm not kidding. Friedman laid much of the blame for the reaction to the Market crash of 1929 to banks converting their assets into dollars -- then failing -- causing people to hoard money because they no longer trusted the banks. The result was a net contraction of the money supply and what money was still left to loan out was done so at high interest rates.
Bears dine on beef