How an Economy Grows and Why It Crashes

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G O V E R N M E N T   G E T S   C R E A T I V E
The new bank director, Max Goodbank VII, was not crazy 
about the new fi sh notes. He thought the ease in which the 
notes could be printed would create dangerous incentives for 
the senators. Yet, he could sleep soundly at night provided 
that the government maintained enough actual government 
fi sh in the bank to redeem all the notes. 
Not surprisingly, his confi dence didn’t last long. 
Soon, Franky and his 
agents had handed 
out far more Fish 
Reserve Notes than 
the government’s 
account had fi sh 
to redeem. When 
Max Goodbank 
noticed the 
dwindling reserves, 
he headed to the 
Senate to sound 
the alarm. 
“Franky, stop the 
presses!” shouted 
Max. “I have only nine fi sh available for every  10 notes 
that you guys have handed out. If the savers fi gure out that 
there really aren’t enough fi sh to cover their deposits, there 
will be a run on the bank and I’ll be out of fi sh. You have 
to stop issuing Fish Reserve Notes and raise taxes. We’ve 
got to replace our reserves.”

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