 Since the money supply is elastic, the problem of inflation (too much money in too small economy) should never happen in a mutual credit, and if it does, it indicates a failure of governance.Some systems allow the 'house' account unlimited spending, and this destroys the equilibrium, resulting either in inflation, or in recession.Depending on the meaning of 'mutual' a mutual credit economy might imply that the people who give value to the money decide which endeavours deserve the privilege of credit.