Failure As An Economic Policy

[Toddsterpatriot]

Hahahah. Don't make me laugh .... hahahah.
So... you had 0 cash, 0 deposits in the bank
You write down on your balance sheet:

Toddsteerpatriot's Balance Sheet
Assets : 1,000
Liabilities : 1,000
Then ,you went to the grocery store grabbed some groceries, went with the cashier ,and presented your shiny expanded balance sheet. The look of the cashier must have been something to behold.
Hey if you took a pic please post it... hahaha.
How did that go? hahaha.

I expanded my balance sheet by using my credit card.
Weird, I'm not a bank or the Fed.

 

[Mexicano]

I expanded my balance sheet by using my credit card.
Weird, I'm not a bank or the Fed.

... but you could only expand it because there is a banking system in place.
Without banks you would not be able to expand your balance sheet.
I have to re-state what I said before the economy is a set of interleaved balance sheets.

 

[Toddsterpatriot]

... but you could only expand it because there is a banking system in place.
Without banks you would not be able to expand your balance sheet.
I have to re-state what I said before the economy is a set of interleaved balance sheets.

... but you could only expand it because there is a banking system in place.
Without banks you would not be able to expand your balance sheet.

I can expand my balance sheet with a non-banking counterparty.

How can you expand your balance sheet on your own?
Banks simply do the following journal entry
Assets (Loans) + 100
Liabilities ( Deposits ) + 100

Did you ever explain how a bank does this on their own?

 

[Mexicano]

... but you could only expand it because there is a banking system in place.
Without banks you would not be able to expand your balance sheet.

I can expand my balance sheet with a non-banking counterparty.

You can expand it quite literarily "on your own". That is no one will take the numbers on your balance sheet at face value or allow you to transact with it, as I said , thats the difference with banks.

How can you expand your balance sheet on your own?
Banks simply do the following journal entry
Assets (Loans) + 100
Liabilities ( Deposits ) + 100

Did you ever explain how a bank does this on their own?

No I didn't. Do I really have to?
The basis is the fractional reserve system that allows banks to hold only a fraction of the deposits as cash.
Also the fact that the Fed can lend reserves to banks on short and long term, as well as banks lending excess reserves from one another using their assets as collateral for such loans.

 

[Toddsterpatriot]

You can expand it quite literarily "on your own". That is no one will take the numbers on your balance sheet at face value or allow you to transact with it, as I said , thats the difference with banks.



No I didn't. Do I really have to?
The basis is the fractional reserve system that allows banks to hold only a fraction of the deposits as cash.
Also the fact that the Fed can lend reserves to banks on short and long term, as well as banks lending excess reserves from one another using their assets as collateral for such loans.

You can expand it quite literarily "on your own". That is no one will take the numbers on your balance sheet at face value or allow you to transact with it, as I said , thats the difference with banks.

You can only expand it with a counterparty. Duh.

No I didn't. Do I really have to?

No you didn't. And you can't. But it's funny that you think so.

The basis is the fractional reserve system that allows banks to hold only a fraction of the deposits as cash.

Deposits? You mean from a counterparty? Not on their own?

Also the fact that the Fed can lend reserves to banks on short and long term, as well as banks lending excess reserves from one another using their assets as collateral for such loans.

The Fed and other banks? You mean with counterparties, not on their own. LOL!

 

[Toddsterpatriot]

You can expand it quite literarily "on your own". That is no one will take the numbers on your balance sheet at face value or allow you to transact with it, as I said , thats the difference with banks.



No I didn't. Do I really have to?
The basis is the fractional reserve system that allows banks to hold only a fraction of the deposits as cash.
Also the fact that the Fed can lend reserves to banks on short and long term, as well as banks lending excess reserves from one another using their assets as collateral for such loans.

Where did you go?
Running away from your errors again?

 

[Ringo]

The city of New York conducted mental health surveys of its citizens, with a $5 bill attached to the questionnaires as an incentive to fill out the surveys. The envelopes looked like spam, and most of them were thrown in the trash. The city spent $9 million on such surveys.- NYP

 

[Toddsterpatriot]

You can expand it quite literarily "on your own". That is no one will take the numbers on your balance sheet at face value or allow you to transact with it, as I said , thats the difference with banks.



No I didn't. Do I really have to?
The basis is the fractional reserve system that allows banks to hold only a fraction of the deposits as cash.
Also the fact that the Fed can lend reserves to banks on short and long term, as well as banks lending excess reserves from one another using their assets as collateral for such loans.

No I didn't. Do I really have to?

Where did you go? Yes, you really have to.

 

[Mexicano]

View attachment 801307

No I didn't. Do I really have to?

Where did you go? Yes, you really have to.

Toddster,
A bank doesn't expand the balance sheet on its own.
The bank provides reserves in case its levels go too low, and it can borrow reserves from other banks using its assets as collateral. Also , through the Fed, banks make transfer settlements at the end of the day . The banking system as a whole is what allows them to expand their balance sheets and have any other economic agent consider that expansion as valid.

 

[Toddsterpatriot]

Toddster,
A bank doesn't expand the balance sheet on its own.
The bank provides reserves in case its levels go too low, and it can borrow reserves from other banks using its assets as collateral. Also , through the Fed, banks make transfer settlements at the end of the day . The banking system as a whole is what allows them to expand their balance sheets and have any other economic agent consider that expansion as valid.

A bank doesn't expand the balance sheet on its own.

Thank goodness. Me neither. Glad to shed a bit of light.

Let me know if you have any questions about banking or accounting.

Always glad to help.