Assets Quote by Milton Friedman
“There's only one thing that all of the central banks control and that is the base, their own liability, and they can control that in various ways. They can control it directly by open market operations, buying and selling government securities or other assets, for example, buying and selling gold, or they can control it indirectly by altering the rate at which banks lend to one another.”
About This Quote
Source Speech: Economic Commentary, date unknown
Central banks control the monetary base, affecting liquidity via open market operations and interest rates.
In simple terms: Banks manage money supply.
Understand how policy impacts economy.
Themes
Mood
Type
When to use this quote
- policy debates
- financial planning
- investment decisions
Key Concepts
Questions to Reflect On
- What are the risks of over‑controlling the base?
- How do open market operations influence inflation?
Policy effects can be delayed and unpredictable.