Toddsterpatriot
Diamond Member
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?