Bill Still's Money Masters

[Toddsterpatriot]

Actually, there really isn't a need for deposits, because the bank actually lends you money based on your signature on the note.

Try starting a bank and making loans with no deposits.
Let me know which federal prison they send you to, I'll write.

Um, a bunch of guys back in 1913 did exactly that. The Fed doesn't take deposits, and it makes billions in loans every day.

Now you're just being silly. Of course someone borrowed them.

Really? Someone borrowed $20s from the Fed?

Yep, every day in massive quantities. I guess you don't realize that your $20 bill only represents bank debt, do you?
"Federal Reserve" - a bank
"Note" - debt.



Um, yeah. Why do you think not?



No, they don't create loans from a deposit, hence your deposit is still there, the bank still owes it to you, along with now owing the $90 to the borrower.
Cause all "cash" is these days is a physical manifestation of what a bank owes you, as in "Federal Reserve Note". --- Bank debt.



So what? They just take the collateral.



You really don't understand the process, do you? The Fed doesn't just make a loan, they buy debt. When Citibank gets a loan from the Fed, they sell treasuries or other assets like CDOs and MBSs to the Fed.

If you think banks are so wonderful, maybe it's simply because you don't understand the whole process.



Only in theory, because most money in banks isn't in deposited in CDs, it's in demand accounts.



Again, you don't understand the process. That $90 becomes a deposit, and $81 is loaned out, which then becomes a new deposit, and $72 is loaned out. The process continues until nearly $1000 is created based on the initial $100. That's the money multiplier. And please note that every single one of those dollars was created with an interest charge.

And those profits sure are great! Just look at all the dough they made in 2008 and 2009.

Citibank was profitable in 2009, what are you talking about?
A few billion in losses in 2008 were taken care of with a barrel of nails covered in a thin layer of gold coins, also known as the Fed buying MBSs, CDOs and other crappy investments from them at interest.

instead of the government issuing silver certificates or even United States Notes that bear no interest charges?

I pay exactly the same interest on my FRNs as I do on my US Notes and silver certificates, 0%.

Goodness me, you sure do pay interest on FRNs every day. You pay taxes, don't you?

Really? Someone borrowed $20s from the Fed?

Yep, every day in massive quantities.

No, people don't borrow $20s from the Fed.

No, they don't create loans from a deposit,

LOL! Like I said, you start your own bank and make loans with no deposits.
You keep in touch.

You really don't understand the process, do you? The Fed doesn't just make a loan, they buy debt.

Wait, you said people borrow $20s, and now you say they don't.
You sure do change your story.

That $90 becomes a deposit, and $81 is loaned out, which then becomes a new deposit, and $72 is loaned out. The process continues until nearly $1000 is created based on the initial $100. That's the money multiplier.

You mean we end up with $1000 in deposits and $900 in loans.
Why does that make you sad?

And please note that every single one of those dollars was created with an interest charge.

It's true, banks charge interest on the $900 they loan and owe interest on the $1000 they accept in deposits.

Goodness me, you sure do pay interest on FRNs every day. You pay taxes, don't you?

If "Jeff" borrows from the bank and gets $20s, what does that have to do with my taxes?

 

[joewp]

Really? Someone borrowed $20s from the Fed?

Yep, every day in massive quantities.

No, people don't borrow $20s from the Fed.

Banks and the government borrow billions a day from the Fed. Like I said, those $20s are just physical representations of the bank debt.

No, they don't create loans from a deposit,

LOL! Like I said, you start your own bank and make loans with no deposits.
You keep in touch.

Are you being deliberately obtuse? Like I said, that's exactly what happened in 1913 when the Fed was created.

You really don't understand the process, do you? The Fed doesn't just make a loan, they buy debt.

Wait, you said people borrow $20s, and now you say they don't.
You sure do change your story.

Where did I say they don't? This is starting to get tiresome. I'm only waiting till I can post links, so you'll see I'm right.

That $90 becomes a deposit, and $81 is loaned out, which then becomes a new deposit, and $72 is loaned out. The process continues until nearly $1000 is created based on the initial $100. That's the money multiplier.

You mean we end up with $1000 in deposits and $900 in loans.
Why does that make you sad?

It doesn't make me sad, it makes me mad. 90% of your so-called "deposits" were created from nothing by the banks. Can you do that? If not, why should the banks be able to?

And please note that every single one of those dollars was created with an interest charge.

It's true, banks charge interest on the $900 they loan and owe interest on the $1000 they accept in deposits.

I see, you don't get that $900 of your so-called "deposits" in the the scenario were also created from debt and carry interest charges.

But why do you think that the Fed and commercial banks should be allowed to create our money, especially when the Constitution is clear on the point that the Congress should issue the money?

Goodness me, you sure do pay interest on FRNs every day. You pay taxes, don't you?

If "Jeff" borrows from the bank and gets $20s, what does that have to do with my taxes?

Part of your taxes pay the interest on the national debt, or did you think the government doesn't pay interest on that $16 trillion it owes?

You're defending a scam, the greatest multi-generational scam in the history of the world, and you can't give any more argument than simple contradiction? Perhaps you should examine your beliefs more closely.

 

[Toddsterpatriot]

Really? Someone borrowed $20s from the Fed?

Yep, every day in massive quantities.

No, people don't borrow $20s from the Fed.

Banks and the government borrow billions a day from the Fed. Like I said, those $20s are just physical representations of the bank debt.

No, they don't create loans from a deposit,

LOL! Like I said, you start your own bank and make loans with no deposits.
You keep in touch.

Are you being deliberately obtuse? Like I said, that's exactly what happened in 1913 when the Fed was created.



Where did I say they don't? This is starting to get tiresome. I'm only waiting till I can post links, so you'll see I'm right.



It doesn't make me sad, it makes me mad. 90% of your so-called "deposits" were created from nothing by the banks. Can you do that? If not, why should the banks be able to?

And please note that every single one of those dollars was created with an interest charge.

It's true, banks charge interest on the $900 they loan and owe interest on the $1000 they accept in deposits.

I see, you don't get that $900 of your so-called "deposits" in the the scenario were also created from debt and carry interest charges.

But why do you think that the Fed and commercial banks should be allowed to create our money, especially when the Constitution is clear on the point that the Congress should issue the money?

Goodness me, you sure do pay interest on FRNs every day. You pay taxes, don't you?

If "Jeff" borrows from the bank and gets $20s, what does that have to do with my taxes?

Part of your taxes pay the interest on the national debt, or did you think the government doesn't pay interest on that $16 trillion it owes?

You're defending a scam, the greatest multi-generational scam in the history of the world, and you can't give any more argument than simple contradiction? Perhaps you should examine your beliefs more closely.

Banks and the government borrow billions a day from the Fed. Like I said, those $20s are just physical representations of the bank debt.

$20s that people don't borrow from the Fed. Glad you realized your error.

Are you being deliberately obtuse? Like I said, that's exactly what happened in 1913 when the Fed was created.

Why are you conflating commercial banks with central banks? Are you being obtuse?

90% of your so-called "deposits" were created from nothing by the banks.

Created from deposits.

Can you do that?

Yes, I can.

I see, you don't get that $900 of your so-called "deposits" in the the scenario were also created from debt and carry interest charges.

Yes, I see that banks pay interest on $1000 and receive interest on $900.
Did you have a point? I mean besides confirming mine?

Part of your taxes pay the interest on the national debt

Which has nothing to do with the $20s "Jeff" borrowed from the bank.
Why does this simple fact confuse you so?

You're defending a scam,

Right. Deposits forming the basis for loans is a scam.
Oh, look, something shiny. Quick, follow it. LOL!

 

[joewp]

OK Toddster, you are now officially a waste of my time.

Thanks for revealing that so quickly. Have fun in your teenage wasteland.

Salute

[that's the Italian word sal ut' te, which means wishing you good health, sort of like "have a good life", just to clarify since I'm new here]

 

[Toddsterpatriot]

OK Toddster, you are now officially a waste of my time.

Thanks for revealing that so quickly. Have fun in your teenage wasteland.

Salute

[that's the Italian word sal ut' te, which means wishing you good health, sort of like "have a good life", just to clarify since I'm new here]

It's sad that the truth is a waste of your time.

If you ever get a clue, be sure to come back and I'll be happy to try to clear up more of your confusion.

 

[joewp]

Of course, you refuse to answer my question above.

But why do you think that the Fed and commercial banks should be allowed to create our money, especially when the Constitution is clear on the point that the Congress should issue the money?

Care to answer that? If not, I won't be responding. Thanks anyway.

 

[DSGE]

Of course, you refuse to answer my question above.

But why do you think that the Fed and commercial banks should be allowed to create our money, especially when the Constitution is clear on the point that the Congress should issue the money?

Care to answer that? If not, I won't be responding. Thanks anyway.

Congress does retain the authority to issue money. They've just delegated that job to an institution called the Federal Reserve, the same way they delegate the collection of taxes to the IRS.

 

[Toddsterpatriot]

Of course, you refuse to answer my question above.

But why do you think that the Fed and commercial banks should be allowed to create our money, especially when the Constitution is clear on the point that the Congress should issue the money?

Care to answer that? If not, I won't be responding. Thanks anyway.

But why do you think that the Fed.......should be allowed to create our money

Because Congress said they could.

But why do you think that .......commercial banks should be allowed to create our money

Commercial banks don't create our money. They accept deposits and loan out a portion.

 

[joewp]

But why do you think that the Fed.......should be allowed to create our money

Because Congress said they could.

Not an answer, sorry. I asked you why the Fed should be allowed to create our money. That means you explain why it's so "good" for us and what purpose it serves that Congress and the Treasury couldn't do.

But why do you think that .......commercial banks should be allowed to create our money

Commercial banks don't create our money. They accept deposits and loan out a portion.

Nope, you're completely wrong. The Dallas Fed says they do right here:
http://www.dallasfed.org/assets/documents/educate/everyday/money.pdf
See page 11:

Banks actually create money when they lend it.

So get your facts straight. Maybe one day when you are correctly educated we can continue. Until then you're just another poor slob who's being scammed every day by "the banking system" and I feel sorry for you and the hundreds of millions like you.

 

[Toddsterpatriot]

But why do you think that the Fed.......should be allowed to create our money

Because Congress said they could.

Not an answer, sorry. I asked you why the Fed should be allowed to create our money. That means you explain why it's so "good" for us and what purpose it serves that Congress and the Treasury couldn't do.

But why do you think that .......commercial banks should be allowed to create our money

Commercial banks don't create our money. They accept deposits and loan out a portion.

Nope, you're completely wrong. The Dallas Fed says they do right here:
http://www.dallasfed.org/assets/documents/educate/everyday/money.pdf
See page 11:

Banks actually create money when they lend it.

So get your facts straight. Maybe one day when you are correctly educated we can continue. Until then you're just another poor slob who's being scammed every day by "the banking system" and I feel sorry for you and the hundreds of millions like you.

That means you explain why it's so "good" for us and what purpose it serves that Congress and the Treasury couldn't do.

You didn't ask me if it was good for us, you asked why it should be allowed.
Do you have a brain injury? Short term memory loss?

Banks actually create money when they lend it.

When banks lend out already created money, they add to the money supply.
When they do it with a time deposit, your preferred type, with a 0% reserve requirement, the money multiplier is potentially infinite.

Until then you're just another poor slob who's being scammed every day by "the banking system"

Careful, there's a banker under your bed.

 

[joewp]

That means you explain why it's so "good" for us and what purpose it serves that Congress and the Treasury couldn't do.

You didn't ask me if it was good for us, you asked why it should be allowed.
Do you have a brain injury? Short term memory loss?

Yeah, I just did above. Now answer the question.

Banks actually create money when they lend it.

When banks lend out already created money, they add to the money supply.

Cant' read plain English? It says "Banks actually create money when they lend it". Not "banks lend out already created money".

When they do it with a time deposit, your preferred type, with a 0% reserve requirement, the money multiplier is potentially infinite.

Except practically, it never happens because the majority of the proceeds of the loaned money do not go into time deposits.
Not only that, since the person who made the time deposit in the first place knows is money is gone for the duration, he can't use it as money like a demand deposit customer can. So it's really not as inflationary, almost not inflationary at all.

Until then you're just another poor slob who's being scammed every day by "the banking system"

Careful, there's a banker under your bed.

Nope, cause I don't have a mortgage or owe money to banks (personally, but through the national debt I do).

That's ok. I can see you don't quite understand the system. Start with that booklet from the Dallas Fed I linked earlier When you're done, we can continue.

 

[Toddsterpatriot]

That means you explain why it's so "good" for us and what purpose it serves that Congress and the Treasury couldn't do.

You didn't ask me if it was good for us, you asked why it should be allowed.
Do you have a brain injury? Short term memory loss?

Yeah, I just did above. Now answer the question.

Banks actually create money when they lend it.

When banks lend out already created money, they add to the money supply.

Cant' read plain English? It says "Banks actually create money when they lend it". Not "banks lend out already created money".

When they do it with a time deposit, your preferred type, with a 0% reserve requirement, the money multiplier is potentially infinite.

Except practically, it never happens because the majority of the proceeds of the loaned money do not go into time deposits.
Not only that, since the person who made the time deposit in the first place knows is money is gone for the duration, he can't use it as money like a demand deposit customer can. So it's really not as inflationary, almost not inflationary at all.

Until then you're just another poor slob who's being scammed every day by "the banking system"

Careful, there's a banker under your bed.

Nope, cause I don't have a mortgage or owe money to banks (personally, but through the national debt I do).

That's ok. I can see you don't quite understand the system. Start with that booklet from the Dallas Fed I linked earlier When you're done, we can continue.

Yeah, I just did above. Now answer the question.

Wow, you get bossy when I point out your ignorance.

That means you explain why it's so "good" for us and what purpose it serves that Congress and the Treasury couldn't do.

Congress and the Treasury certainly could do it.

It says "Banks actually create money when they lend it". Not "banks lend out already created money".

I already told you to try making loans without taking deposits. Write after you're sent to Federal prison.

Not only that, since the person who made the time deposit in the first place knows is money is gone for the duration, he can't use it as money like a demand deposit customer can. So it's really not as inflationary, almost not inflationary at all.

It increases the money supply, if you read up on the topic, you'd understand how that works.

Nope, cause I don't have a mortgage or owe money to banks

That's awesome!

(personally, but through the national debt I do).

The national debt is owed to bondholders, not just "dem ebil banksters"

I can see you don't quite understand the system.

You're funny. Try this....you deposit $1000 in a CD and the bank loans it to me.
I buy a car with it and the seller deposits the $1000 in a CD.
How much has the money supply increased?

 

[akelch]

Enjoying the debate...

 

[joewp]

Yeah, I just did above. Now answer the question.

Wow, you get bossy when I point out your ignorance.

I already told you, I get antsy when my questions don't get answered.

That means you explain why it's so "good" for us and what purpose it serves that Congress and the Treasury couldn't do.

Congress and the Treasury certainly could do it.

I'm glad you admit that. So tell me, wouldn't it be much better for you and me if the Congress and Treasury issued the money without interest? It's been done in this country before. During the Civil War, Lincoln issued United States Notes, a.k.a. "Greenbacks". There's no reason (except for influence from the banks) the US can't issue US Notes again, and pay off the national debt with them. The Fed is truly superfluous, and also expensive, and doesn't need to exist.

I like to quote people smarter than me, so here's a good one from Thomas Edison:

“People who will not turn a shovel full of dirt on the project nor contribute a pound of material, will collect more money from the United States than will the People who supply all the material and do all the work. This is the terrible thing about interest ...But here is the point: If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the People. If the currency issued by the People were no good, then the bonds would be no good, either. It is a terrible situation when the Government, to insure the National Wealth, must go in debt and submit to ruinous interest charges at the hands of men who control the fictitious value of gold. Interest is the invention of Satan.”

I tend to agree with him. How can you defend the Federal Reserve system in light of what Edison said?

It says "Banks actually create money when they lend it". Not "banks lend out already created money".

I already told you to try making loans without taking deposits. Write after you're sent to Federal prison.

Ya know, I knew I was missing something that would shut you up on this point. No, you DO NOT need any silly 'deposits' to make loans if you're a bank. The Federal Reserve says so.
FRB: Reserve Requirements
The pertinent section:

Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities. Within limits specified by law, the Board of Governors has sole authority over changes in reserve requirements. Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks.

Get that? All you need is a deposit with an FRB. If you had $110,000,000 lying around and decided to start a bank, you could take the $10,000,000 and build a few dozen branches, and put the $100,000,000 in an FRB and start making loans. Oh yeah, and at 10% reserve, that's loans adding up to $1 billion. No deposits required.

So you want to retract that silly statement about getting arrested for it?

Not only that, since the person who made the time deposit in the first place knows is money is gone for the duration, he can't use it as money like a demand deposit customer can. So it's really not as inflationary, almost not inflationary at all.

It increases the money supply, if you read up on the topic, you'd understand how that works.

Whatever. You don't want a full reserve system anyway.

Nope, cause I don't have a mortgage or owe money to banks

That's awesome!

Thanks.

(personally, but through the national debt I do).

The national debt is owed to bondholders, not just "dem ebil banksters"

Doesn't matter. The point is the national currency shouldn't be brought into being as debt with interest when it doesn't have to be.
Even though the Fed pays the government the interest it collects on the the treasuries it holds, the money used to buy the t-bills was ultimately created by the Fed and commercial banks at interest.

That doesn't need to be, and it shouldn't be.

I can see you don't quite understand the system.

You're funny. Try this....you deposit $1000 in a CD and the bank loans it to me.
I buy a car with it and the seller deposits the $1000 in a CD.
How much has the money supply increased?

Ya know, this is actually a side point, arguing over a world that doesn't not yet exist. IF we has a 100% reserve requirement on demand accounts, it would be a different story.

But just to answer your question, in reality, smaller than you think. The initial depositor can't use his money because it's loaned out. The buyer used the $100 to buy a car. The seller's deposit is unavailable to him, but the borrower can use it for another car. So it's really probably half of your infinity. Yeah, it's still infinite, but it's a smaller infinity that yours!

Of course, I'd entertain the concept of a full reserve system without time deposits, if that's what you're driving at!

 

[Toddsterpatriot]

Yeah, I just did above. Now answer the question.

Wow, you get bossy when I point out your ignorance.

I already told you, I get antsy when my questions don't get answered.

That means you explain why it's so "good" for us and what purpose it serves that Congress and the Treasury couldn't do.

Congress and the Treasury certainly could do it.

I'm glad you admit that. So tell me, wouldn't it be much better for you and me if the Congress and Treasury issued the money without interest? It's been done in this country before. During the Civil War, Lincoln issued United States Notes, a.k.a. "Greenbacks". There's no reason (except for influence from the banks) the US can't issue US Notes again, and pay off the national debt with them. The Fed is truly superfluous, and also expensive, and doesn't need to exist.

I like to quote people smarter than me, so here's a good one from Thomas Edison:


I tend to agree with him. How can you defend the Federal Reserve system in light of what Edison said?


Ya know, I knew I was missing something that would shut you up on this point. No, you DO NOT need any silly 'deposits' to make loans if you're a bank. The Federal Reserve says so.
FRB: Reserve Requirements
The pertinent section:


Get that? All you need is a deposit with an FRB. If you had $110,000,000 lying around and decided to start a bank, you could take the $10,000,000 and build a few dozen branches, and put the $100,000,000 in an FRB and start making loans. Oh yeah, and at 10% reserve, that's loans adding up to $1 billion. No deposits required.

So you want to retract that silly statement about getting arrested for it?



Whatever. You don't want a full reserve system anyway.


Thanks.

(personally, but through the national debt I do).

The national debt is owed to bondholders, not just "dem ebil banksters"

Doesn't matter. The point is the national currency shouldn't be brought into being as debt with interest when it doesn't have to be.
Even though the Fed pays the government the interest it collects on the the treasuries it holds, the money used to buy the t-bills was ultimately created by the Fed and commercial banks at interest.

That doesn't need to be, and it shouldn't be.

I can see you don't quite understand the system.

You're funny. Try this....you deposit $1000 in a CD and the bank loans it to me.
I buy a car with it and the seller deposits the $1000 in a CD.
How much has the money supply increased?

Ya know, this is actually a side point, arguing over a world that doesn't not yet exist. IF we has a 100% reserve requirement on demand accounts, it would be a different story.

But just to answer your question, in reality, smaller than you think. The initial depositor can't use his money because it's loaned out. The buyer used the $100 to buy a car. The seller's deposit is unavailable to him, but the borrower can use it for another car. So it's really probably half of your infinity. Yeah, it's still infinite, but it's a smaller infinity that yours!

Of course, I'd entertain the concept of a full reserve system without time deposits, if that's what you're driving at!

I'm glad you admit that. So tell me, wouldn't it be much better for you and me if the Congress and Treasury issued the money without interest?

Money is already issued without interest. Unless you pay someone for the $20s in your wallet?

The Fed is truly superfluous, and also expensive,

Expensive? They gave the Treasury about $80 billion last year.
They aren't expensive, they're a profit center.

Get that? All you need is a deposit with an FRB.

You can loan your own money if you'd like.
Of course you had claimed earlier that they create money out of thin air. LOL!

Ya know, this is actually a side point, arguing over a world that doesn't not yet exist.

You can deposit money in a CD now, so the world I'm talking about exists now. Try again?

The initial depositor can't use his money because it's loaned out. The buyer used the $1000 to buy a car. The seller's deposit is unavailable to him, but the borrower can use it for another car.

So answer the question, what is the increase in the money supply?

 

[Toddsterpatriot]

Get that? All you need is a deposit with an FRB. If you had $110,000,000 lying around and decided to start a bank, you could take the $10,000,000 and build a few dozen branches, and put the $100,000,000 in an FRB and start making loans.

In that case, you could loan out your entire $100 million in reserves.


Oh yeah, and at 10% reserve, that's loans adding up to $1 billion. No deposits required.

Wrong, you only need to reserve a portion of your deposits, you have none.
Of course if you loan more than $100 million, your checks will bounce.


So you want to retract that silly statement about getting arrested for it?

If you loan $1 billion with only $100 million at the Fed, you will also be arrested.

 

[Toddsterpatriot]

Doesn't matter. The point is the national currency shouldn't be brought into being as debt with interest when it doesn't have to be.


When banks buy currency from the Fed, the Fed reduces the balance in their account at the Fed. No debt involved. No interest involved.

When I buy currency from my bank, the same thing happens. No debt and no interest.

 

[joewp]

You're not reading very well, are you? I've already posted that the Fed said banks create money, I've already posted that the Fed says you can deposit $1,000,000 at a FRB and then load out $10,000,000. I've already posted the the money multiplier for time deposits is irrelevant in the current discussion, and I see you're employing the "rope-a-dope" tactic of avoiding the point of the discussion, which is (as per Edison) Why do banks get to profit from the issuance of money at the expense of the government and people, instead of the government issuing it?

Do you get he was saying that the bankers will collect interest on the job in excess of the money paid to the people who actually did the work?

Why do you want to support a system of leeches?
Unless you're one?

 

[Toddsterpatriot]

You're not reading very well, are you? I've already posted that the Fed said banks create money, I've already posted that the Fed says you can deposit $1,000,000 at a FRB and then load out $10,000,000. I've already posted the the money multiplier for time deposits is irrelevant in the current discussion, and I see you're employing the "rope-a-dope" tactic of avoiding the point of the discussion, which is (as per Edison) Why do banks get to profit from the issuance of money at the expense of the government and people, instead of the government issuing it?

Do you get he was saying that the bankers will collect interest on the job in excess of the money paid to the people who actually did the work?

Why do you want to support a system of leeches?
Unless you're one?

I've already posted that the Fed says you can deposit $1,000,000 at a FRB and then load out $10,000,000.

You're wrong. You can't loan more than you have. Whether it's your own money or customer deposits.

Banks don't create money out of thin air, they loan a portion of deposits after reserving a portion.

Why do banks get to profit from the issuance of money at the expense of the government and people

Banks don't issue money, they loan a portion of deposits. It's not "at the expense of the government and people", you are free to not use the banking system. You are free to keep your money under your mattress.

instead of the government issuing it?

The government (the Fed) already issues currency, as you've whined repeatedly.
The Treasury could issue currency as well, as they have in the past.
That's still not the banks issuing currency.

Do you get he was saying that the bankers will collect interest on the job in excess of the money paid to the people who actually did the work?

Do you get, I don't care what silly things he said?

Why do you want to support a system of leeches?

I don't support big spending politicians.

Unless you're one?

Nope, sorry, just a guy who understands banking and economics much better than you.
You sound like a Commie. Kill the greedy kulaks, eh comrade?

Thanks for avoiding all my questions, by the way.

 

[joewp]

Get that? All you need is a deposit with an FRB. If you had $110,000,000 lying around and decided to start a bank, you could take the $10,000,000 and build a few dozen branches, and put the $100,000,000 in an FRB and start making loans.

In that case, you could loan out your entire $100 million in reserves.


Oh yeah, and at 10% reserve, that's loans adding up to $1 billion. No deposits required.

Wrong, you only need to reserve a portion of your deposits, you have none.
Of course if you loan more than $100 million, your checks will bounce.

Nope, sorry, you're wrong.
My witness?
eCFR ? Code of Federal Regulations

The pertinent section of the code:

(a)(1) A depository institution, a U.S. branch or agency of a foreign bank, and an Edge or Agreement corporation shall satisfy reserve requirements by maintaining vault cash and, if vault cash does not fully satisfy the institution's reserve requirement, in the form of a balance maintained

(i) In the institution's account at the Federal Reserve Bank in the Federal Reserve District in which the institution is located, or

If you keep $1,000,000 in the FRB, that becomes your reserve, and you can loan out $10,000,000 since 10% of $10,000,000 = $1,000,000, which you have as in your FRB account.

So you want to retract that silly statement about getting arrested for it?

If you loan $1 billion with only $100 million at the Fed, you will also be arrested.

Nope, but you probably should be. You see, you're applying traits like honesty to a system that's fundamentally a scam. I understand your confusion, most normal people wouldn't even think of a scam like the fractional reserve banking system.