If It is a Credit Money System?

This is an intereview with Meredith Whitney on Bloomberg that I think goes well with my previous post. It is from Monday and an interview I had not seen. In the interview she starts talking about credit card lines being cut. Monday Bank of America said they cut 200 billion in credit card lines. According to Meredith, prior to the third quarter there were 4.7 trillion in unused credit card lines. In the 4th quarter this was cut to 4.2 trillion in credit card lines. She estimates that 2.7 trillion in total unused credit card lines will be cut, 500 billion (or 19% of that total) from Citigroup alone.

So are we in a fiat money system or a credit money system? If a credit money system, as the previous post postulates, than the short term impact is deflation not inflation. There is also a multiplier affect associated with that. So while the FED's actions have massive consequences down the road (most likely several years from now), they could be muted much longer than people realize.