The difference between the state banks and the fed, is each dollar entering the economy is not a debt burden to the state. The profits on the loans goes back to the state thereby allowing a combination of social benefits and tax reductions
It's you there are trolling, your claims is a red herring, that's trolling, right. I am arguing with you, look up some bank books, and understand you are trolling a red herring.
Centralizing of power always breeds corruption, and if we know anything about inbreeding we shouldn't allow it to happen. 150 years ago when communications were not great and transportation was difficult, it made sense to have a single currency. Today it's better to have local currencies valued at local exchanges in order to support local economies.
@jokertim777 Yeah most economic "experts" have no idea about money and banking. I only had to listen to her for 2 minutes before I realized she has no clue what she's talking about. The only thing worse than fractional reserve bank, is a fractional reserve bank run by the government, (or a zero reserve bank like the fed).
@jokertim777 I don't think her argument was pro fractional practices. In the interview they were talking past one another. I think that she thought she was answering an FDIC related question and not a fractional question. Agreeably she did literaly say "one to one" but really don't think she was answering what she was asked, so much as what she thought she was asked.
I'm not basing my assessment of EB's position on this single interview... I've watched others as well.
You might want to investigate how her "solution" the Bank of North Dakota operates. It is just a mini-Fed that operates on the State level. It doesn't constitute a break from the Fed system at all, in fact they have an account with the Fed and they use Fractional Reserve Lending. It is an anomaly yes... but not one on which to base any real reform movement. Red herring.
I believe the state can create its own money for highways and projects and not be charged interest. That is one way you keep your taxes down. The Fed charges interest.
This is a step forward but in my mind the creation of credit = the creation of debt. Well, I think I would opt out of debt. Perhaps people need to re-think this whole economy thing from bottom up.
Bad guest this week. She doesn't understand our monetary system or fractional reserve banking AT ALL. banks do not create money, only the fed does. The banks create debt. Your checking account is not money, it is debt (an IOU from the bank). The bank keeps 10% of the money it owes you as reserves. Fractional reserve banking is the problem. It is a fraudulent system based on a con game that invariable ends with collapse.
I haven't followed the conversation, so I don't know exactly your point of view. But there is a video on YouTube there are talking nonsence about the banks creating money, and to argue against these hard core believers are hopeless.
@Dziaji Technically they DO create money - When they give out a loan, that money added to the total amount in circulation. Technically it didn't "exist" in the economy until the loan was agreed. Sure, someone else printed it (the federal reserve) and the rest of what you're saying is true, of course. The banks only act as the release mechanism, and the debt is accrued from the interest charged on the loan, which of course was never released - so the national debt just increases over time
@CokeSupply that is a common misconception. When a bank creates a loan, no money is added to the money supply. You deposit money in the bank, the bank loans most of it out, they create a book entry stating that they now owe you that money. The book entry is not spendable. If you write a check, the bank has to use it's actual reserves to make good on the check, it cannot transfer the book entry to another bank. Therefor the book entry is not "money" because it cannot be spent.
@Dziaji I didn't say that when a bank creates a loan that money is added to the money supply (they can't do that, as they don't have a license to print money whenever they please). What I said was that when a bank creates a loan, the money is added to the total amount in circluation. Please take Juu's advice and spend more time on your arguments, as knocking down a strawman of your own creation is a logical fallacy.
@CokeSupply When a bank makes a loan, no money is added to the amount of circulation. This is what you don't seem to be understanding. The only time money is added to the amount in circulation is when the fed increases it.
No, when a bank create a loan, it does not add to the money supply ( if it's not from the central bank ) it's impossible. These money come from someone else, if I loan you 100 dollars....you have a 100 dollars more....but I have 100 dollars less. so the total money are the same.....must be. Take your own advice and spend a bit more time on your argument.
@kennjohnsen Again you're obfuscating the point - the money that sits in the vaults in the bank is NOT IN CIRCULATION IF IT IS NOT LENT OUT. If someone wants a loan, THEN the money is put into circulation. You loaning money to me is not the same as a bank loaning money to me. If I don't take your 100 dollars, you will spend it - hence, it was and is in circulation. The money in the bank's vaults DOES NOT CIRCULATE UNLESS LOANED, AND THE INTEREST CHARGED WAS NEVER PRINTED
You are obfuscating the point. Fools here say....you deposit 100 dollars, the bank loans out 90 dollars....someone gets these 90 dollars and deposit 90 dollars.....the bank have increased the money supply with 90 dollars....what rubbish. Don't you think that I know that money in the banks basement is not in circulation ? AND WHAT IS THIS RUBBISH INTEREST IS NOT PRINTED
@kennjohnsen I'm not obfuscating the point. I'm just pointing out that you're obfuscating the point by pointing out that things that I'm not pointing out while I was responding to someone else's point. But I would like to point out that you knew that already. What's your point?
@kennjohnsen Interest is the extra percentage to be paid back on a loan, which the bank did not have to start with. This extra amount is only paid back by money put into circulation by other loans made by other people. If the loan wasn't paid back, then physical goods are used as payment instead (such as your home if you can't afford your mortgage). Eventually we get to the position where we are at today - trillions "owed" to the banks - all made up from interest charges over time
Sure interest is extra percentage on a loan. Interest is paid by the loaner, of his income, got nothing to do with other loans. Other than all money is created as debt. The trillions owed to the banks, is not owed by the bank.
@kennjohnsen The loaner got his income from money that only came into circulation by someone asking the bank for a loan in the first place. It didn't grow on a fucking tree!!
No, money do not grow out off the fucking ground, it's all loaned and spended in to circulation by the state or banks. But interest is money there change hands, like if the money was gold, if you loaned an ounce of gold in the bank, the interest would not come from more gold supply, would it.
An exception must be, if the bank take a loan in the central bank, and loan them out, they must increase the money supply, or if a bank take a loan in another currency, they change them in the central bank to local currency, then also they must increase the supply of the lokal currency. Otherwise this that the banks somehow create money, and somehow increase the money supply is obviously rubbish.
@kennjohnsen exactly ken! you get what im saying. In the 2 scenarios you just described, the federal reserve is the one creating the extra money and distributing it through the banks. Which is how the system works. The fed creates the money, banks do not create any money through loans.
@juujuuuujj money and debt are not the same thing. In the US, money is dollars that can be in digital or paper form. Debt is an agreement for someone to pay someone else dollars. In other words, debt is an "IOU dollars". They are not the same.
@Dziaji Money is not "dollars", it's any accepted form of payment, be it physical currency or virtual debt. The "digital IOU money" you're talking about has another name - debt (a.k.a. credit, including deposits, which are also debt). The "dollar brand" is just the measuring stick by which the value of that debt is calculated, it's not money in and of itself.
@juujuuuujj You are very confused, as max's guest is. In the US the dollar is legal tender, it takes 2 forms, digital credits on the federal reserves computer system, and paper dollars. The banks do not create dollars in either form. Only the federal reserve does. Bank deposits are not money. They are an IOU for dollars.
@Dziaji Please, spend more time on your arguments and less time on saying how confused everyone but you is. The "dollar" is just the name of the brand of the currency alone (currency=physical coins and banknotes), and almost all money used for transactions is virtual, i.e. debt. When the Fed increases the number in someone's deposit, it does exactly the same thing as when a bank increases someone's credit. It creates new debt money, but not new currency. Learn the difference between MB and M3.
When the fed increase the money, they increase the money supply, and does not do exactly the same as a bank increase someone's credit, this credit is coming from someone else, and have nothing to do with the money supply.
@kennjohnsen The difference between "money" and "money supply" is like between "size of economy" and GDP. The latter calculates a very small part of the actual size of the former. The broadest way to calculate money supply, M3 counts large deposits. But deposits are debt, not real currency. Credit is also debt, it's used by banks as collateral and payment (money), except its total size is unknown and it's not part of M3. It's a document of promise, accepted as valuable, and as payment.
Hmmmm......in short, my deposit are real currency, and the money in circulation is the money issured by the centran banks, everything is based on money, and only the money issured by the central banks. M3 should be the total money supply.
@kennjohnsen Quite the opposite, the deposit itself is just the debt that the bank owes to you, redeemable in currency. The currency itself is a miniature part (about 1/10) of M3. And M3 is just a miniature part of the total money in use, because "money" means any object or record accepted as payment, which includes debt, and the total amount of debt is unknown. Even an illegal IOU drawn on a piece of toilet paper is money, as long as someone accepts it as payment.
@Dziaji Also, since you think deposits and debt aren't money, just an "IOU for physical currency", when someone makes a transaction from a deposit to a deposit, and receives a good or service in exchange, what do you think happens? Or when someone buys/sells a bond or derivative in exchange for added debt money in their deposit, and then use their debit or credit card to buy a golden toilet seat, where's the physical currency in that picture? The "dollar" brand is just a yardstick for value.
@juujuuuujj I'll explain how this works to you. When someone makes a transaction or buys a bond, the bank has to dip into it's reserves to make good on the IOU. You are not actually spending the deposit. The bank uses it's reserves to convert the amount of your transaction from bank entry deposit in your account, into dollars (paper or electronic form), and then sends those dollars to whatever bank is receiving the money. The bank must then replace those reserves when new deposits come in.
@Dziaji What do you think a bank's "reserves" are? It's people's deposits, i.e. the bank's debt to them, not real currency. A financial transaction is a simple addition and subtraction of debt from one account to another, and actual currency plays no role, except to measure the value of said debt. There's no such term as "IOU dollars", what you're looking for is debt, calculated in dollars. It has nothing to do with the currency itself, except that its stated value us measured in that currency.
@juujuuuujj A banks reserves are dollars. Some is in cash in the vault and some is in digital credits on the fed's computers. When there is a bank to bank transaction, dollars are transferred from one bank to another. The banks do not transfer debt to each other, they transfer reserves. Look it up.
@juujuuuujj It's as if you have no understanding of the monetary system and are just talking from your own imagination. a simple wikipedia search on "bank reserves" will teach you
@kennjohnsen When you give the bank $100, it keeps $10 for reserves and loans the other $90 out to other people. It then creates an entry in it's books saying that it owes you $90 and the other $10 is available for you. If you spend say $20 out of your account via check to another bank, your bank has to dig into the reserves of other people's deposits to come up with the additional $10, and replenish it when more deposits come in. If everyone takes out 20%, the bank goes bankrupt.
No, it does not owe me 90 dollars, it owes me 100 dollars, and all the 100 dollars must be available for me. Sure if there is a run on the bank, the bank have a problem, then they take the problem to the federal reserve, then the federal reserve pump them up with money.
@kennjohnsen Its not complicated. Banks have a 10% reserve requirement, meaning they can lend $90 of every $100 you deposit with them. Then, the person who takes that loan pays someone else with the $90 for a house, then that person puts $90 in their bank, who then loans out about $81 which goes to another bank. At the end of the day, there is more money in existence than when you deposited that $100. Its so simple that its hard to grasp, but that is how banks create new money.
It seems to be complicated for you, I deposit 100 dollars, the bank loans out 90 dollars.....the bank has 10 dollars.....then someone puts back the 90 dollars.....the bank is back to 100 dollars......not one dollars more in existence. You people should think a bit before you buy this nonsense from this video here on YouTube.
@kennjohnsen If you think the money supply is entirely a creation of the Federal Reserve and that banks play no role please just read some very basic introductory banking texts.
@kennjohnsen You don't know what you're talking about. Person A Deposits $100, bank loans $90 to person B. Person B deposits in another bank or same bank. Checkbook money now totals $190. The functional money supply is increased. $90 was created out of thin air. M1 M2 MZM - Look it up, do your self a favor. Then go buy food and gold like the rest of us that know what the F is going on.
You don't know what you are talking about, person A deposits $100.....the bank loans $90 to person B......the bank is down to 10 dollars.....person B deposits the 90 dollars in a bank.....that's 100 dollars, you move 90 dollars from one bank to another, that does not create any money.....does it. You guys should think before you come up with these math, you make yourself look stupid, do you know what the fucking is going on.
You go and look up reserve banking, and stay away until you have. Fractional reserve banking means, the banks must keep a fractional of the deposits in reserve. That's it, stay away until you understand.
@kennjohnsen You have the illusion that banks are under the obligation of consideration. When a bank makes a loan, all they do is create an account and credit the account for the amount of the loan. That bank credit now exists as "money" you may spend. The bank calls up the central bank and borrows from them, 10% of what they loaned you, making their reserve.
I think they make the loan in the Fed, a little time before they loan them out. 10 % of what they loaned me is their reserve ? no....10 % of my deposit is the reserve.
@kennjohnsen This yahoo thing sucks for long discussions. Banks may call the fed at any time and take out a loan from the fed, they take out this loan to cover the reserve requirements of their liabilities. When a person deposits money to a bank, the bank has a liability, when a person borrows from the bank, the bank has a liability. Of all a banks liabilities, they must have 10% cover aka reserves.
@kennjohnsen Yes, 10%. If you get a loan for 100, they credit you an account for 100. they go borrow 10% from the central bank - they now have 10% cover on what is now a demand deposit. If you get a loan for a house from bank A, bank A makes an account for you, the house seller gets the check and deposits it to bank B. Bank A pays bank B, bank B now has a demand deposit for the amount of the loan, and borrows 10% from central bank. You pay bank A, your loan is an asset to A. Created & spent
Where do you get this 10 % borrowing from the central banks from. They got to keep 10 % of your deposits, they got to have some when the dopositors want some. But that's it, there are nothing about 10 % of the out loan in deposits ? how should, and why should they keep 10 % in deposits of your loan, borrowing in the central bank ? where do you get it from ?
@kennjohnsen A loan the bank makes to one person will end up as a deposit for someone else. It could be the same bank or another bank. It does not matter. Functionaly the bank that ends up with the deposit from the loan, must cover the demand account.
This borrowing from the central, by the comercial, is loaned at the "prime rate". I'm sure you've heard this term before.
You are trying to play smart, the idea is that they got to keep a fraction of the deposit in reserve, but nothing about a reserve of an out loan. A loan is not a deposit.
Right, if you loan in one bank, and you deposit in another bank, you make a deposit in that bank. A prime rate is a rate sat by the banks, at what they lend to favored customers. It got nothing to do with the Fed, you don't know that, so look it up. The rate the bank has to pay the Fed is called Discount Rate.
You have done a search, it's easy to prove whether the bank produce credit out of thin air, show me the banks books....balance sheet, where it says so. It must be in the books.....right.
I have seen this video more than one time. If the banks create credit out of the blue, it must be in their books, show me the books, where you can see they loan out money they don't have, then the argument is over.
@kennjohnsen Oh go read "modern money mechanis", a document produced by the federal reserve. You can find their statement, "The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money." If you've any further doubt that banks create money, please feel free to take the issue up with the federal reserve or any other central bank of your choice.
I can hardly believe any bank have written this money mechanise, I haven't read it yet, just had a glance at it. I'll say it's rubbish, the banks multiply the money 10 times ? my ass, show me a bank book where the bank have multiplyed their deposits with 10 times created credit. If so, I'll bend over, and say very sorry about how stupid I am, and you can kick my ass.
@kennjohnsen Oh go read "modern money mechanis", a document produced by the federal reserve. You can find their statement, "The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money." If you've any further doubt that banks create money, please feel free to take the issue up with the federal reserve or any other central bank of your choice.
Your buddy Bob Murphy is pulling legs here, I can hardly believe he believe the rubbish he says. As he himself state, Sally get 900 dollars of Billy's 1000 dollars deposit ? so where is the multiplyed credit ? it's rubbish.
@TheBullionBull The process of fractional reserve banking does not create any money. That's what ken is trying to explain to you. It creates multiple "claims" to the same money, but there is no more money in existance when the bank makes a loan.
@loudandright No they cannot. That is what people have trouble understanding. Just because your banks says they have your $100 on your bank statement, doesn't mean they actually have it. As an example, if i am the only customer of a new bank and i deposit $100, then the bank loans out $90 of my money, then i write a check to my friend for $20, the check will not go through because the bank only has $10. The bank cannot transfer the $90 of debt on it's books to another bank. DEBT IS UNSPENDABLE.
@Dziaji thanks for your reply... it think the concept is starting to dawn on me... Short recap: I give the bank a 100 dollars, from which they use 10 dollars as collateral to create a 90 dollar IOU to a 3rd person. This 3rd person sees this 90 dollar IOU as spendable money, which it is not... So the IOU-money the 3rd person spend is in fact debt. (hence making all our money debt...? right?)
@loudandright Close, the borrower is the one that get's the real, spendable $90, the depositor has waiting for him at the bank, $10 spendable dollars (bank reserves) and an IOU for $90. The depositor can spend no more than $10 dollars out of the account unless the bank draws the reserves from other depositors. In this way a bank uses a pool of reserves to make it appear as if it has grown the money supply when it actually hasn't. It has simply made a bunch of promises that it can't make good on.
@mersk100 Because they aren't part of the money supply. MB measures the money supply. All the other ones include unspendable debt into the number. That's what I've been trying to teach people in this thread. If you can't spend something, It's not money. Think of this debt like a bond. You can't spend a bond, you have to exchange it for money (dollars) and spend those. This is known as a note. It used to be that people used bank notes as money, but since the fed was created we now use fed credit.
@Dziaji Then you do not understand what the money supply is. To you the money supply is "cash". You're wrong.
All money in the current fiat regime is debt. And yes, you can "spend" a bond. You can "spend" anything so long as the party with whom you trade accepts that the "thing" has value.
@kennjohnsen Only 10% of the money, or whatever the fractional rules happen to be, is created by the central bank. The rest is created by commercial banks.
@kennjohnsen This is what you're going to do, play these sophmoric games. You're more intrested in winning an argument than learning something. Have fun with the rest of the sheep.
@mersk100 I do understand what the money supply is. Ok try to go to the store with your bond certificate and see if they will give you a gallon of milk and change. Go ahead I'll wait......... Oh it didn't work? They called security on you? thought so. You can't spend a bond. By your definition, apples are money, cause someone might accept apples as payment.
@mersk100 You'll never learn with an attitude like that, money is defined as what is commonly accepted as payment for goods and services. You cannot trade bonds for services. There for they are not money. Bond and debt are more akin to income producing assets than money.
@Dziaji You're either being purposefully obtuse or lack the ability to comprehend what I said. Note I did NOT say that bonds were money. Show me where I said that? I did NOT! Read what I fcking wrote!
@mersk100 You said "you can spend a bond" and I am saying, "no you cannot spend a bond because it is not money" and neither is debt. Like a bond, all debt is a promise to pay money. Therefor it makes no sense to look at M3 and other similar measurements because if something is unspendable, why add it to the money supply data. MB is the supply of money, because only the money counted in MB is actual spendable money.
@Dziaji Thank you for SPENDING your time to show us all your sloppy use of words. Also it appears you have no real comprehension of what money is in the modern fiat debt regime. It is no wonder you can not comprehend the concept that banks do indeed create money.
@mersk100 I can comprehend why you think they do, but what they create is not actually money. Debt and money are the not the same thing. What makes you think that they are? The fed creates money by digitally crediting banks. The banks transact those credits in digital or paper form. It's not very complicated. Just because the bank says your account has X dollars in it, does not mean the dollars are their waiting for you. Bank runs expose the illusion.
@Dziaji I'll give you the same answer I gave ken, go read modern money mechanics, a document from the federal reserve. It states, "The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money." - You can go argue with them.
@mersk100 If that were true, there would be no such thing as a bank run. You seem to be avoiding the act of actually discussing the issue so I'll let you go.
@Dziaji I'm not going to waste time on your red hearrings and attempts to change the subject. Are you going to read the document from the federal reserve or not?
@mersk100 Since you don't know what a bank run is i'll explain it to you. A bank run is when a bank runs out of reserves because of too many people withdrawing/spending money out of their accounts. When this happens, all the bank has left is debt and since debt is not money, they go bankrupt. It is very important to understand this. I'll help you learn.
@Dziaji There you go again with your loose use of language and equivocations. Hey Mr Expert, since you're too scared and lazy to go read it here it is, from the fed, "The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money."
You've proven beyond a shadow of a doubt, you've zero idea how fiat debt money works.
@mersk100 My credentials are my understanding. You still don't understand bank runs? Man I just explained it perfectly, this isn't that complicated. Do you have any thoughts of your own or are you going to keep quoting that same false statement. I just explained bank runs to you. Counter the point, or you lose the debate. That's how debates work.
@kennjohnsen No kidding, it is absurd, but that is the point. Banks loan something they do not have. Look up the case of "First National Bank of Montgomery V. Jerome Daly" in 1969.
I can see the idea that banks create credit out of thin air is pretty widespread, but as I said, it can fairly easy be proven if that is the case or not. It must be in the banks books.
You should get real, you live in a fantasy world, are you trolling. Go and look up a bank balance sheet, I have, and I don't see any money multiplying.
Just looked up a bank books/balance sheet, and they clearly have a larger deposit - capital, their own loan....than their out loan. When you think about it, that's how it must be. Go and look it up yourself, and you will see for yourself how ridiculous this claims are.
@kennjohnsen Yes I know the bank owes you 100 when you put in 100, but it only has 10 of it on hand. the other 90 has to be pulled from the reserves of other people's deposit if you demand more than 10 at any given time.
@TheBullionBull That is not correct. That article is wrong. The bank does not create new money with a loan. I already told you, it creates multiple claims to the existing money. If sally deposits 1000 dollars, and the bank loans 900 of it to bob, there is still only $1000 in existence. The difference is not sally has a claim to $900 that has been given to bob. Get it?
@TheBullionBull a lot of people struggle with this concept, including good economists. The thing you and them are missing is that bank credit is not money. You cannot spend bank credit. When you write a check from one bank to another, the reserves are transfered, not the bank credits.
@USBankruptcy I don't know where you get your information, however it does not represent any facts that I am aware of. State owned banks fall under US banking law like any other bank.
Fractional reserve banking is robbery, although I must agree with this woman its much better as a state owned, all the fractional reserve swindling doesn't go into Bernanke and his cronies pockets.. It goes back into the pockets of the people of the state :)
5.34 that's not true, as I understand it they can only lend $10 off the $1 you deposit if they deposit that $1 in the central bank, otherwise they have to lend the fraction which is 10 keep ten cents and lend 90 cents.
Borrowing short they lend long, but that's credits not deposits, and I think they again have to deposit that credit in the central bank.
ND may be doing pretty well at the moment -- but it seems like these new proposed systems are still going to be using FIAT.
So if Bank of ND is going up %20-25 in paper dollars --- it may not matter in a hyperinflationary event and all these state run banks are still going to go down. It just seems like the distributed structure only limits liabilities on the debt.
@horlacsd I'm not sure what do you think about the Move to Oregon? Please help me on that if you can. I need to get out of this Trap I'm in here with all these Greedy Banksters...
The difference between the state banks and the fed, is each dollar entering the economy is not a debt burden to the state. The profits on the loans goes back to the state thereby allowing a combination of social benefits and tax reductions
whatupwiththatdog 6 months ago
good clip
BOMBOVA 8 months ago
It's you there are trolling, your claims is a red herring, that's trolling, right. I am arguing with you, look up some bank books, and understand you are trolling a red herring.
kennjohnsen 10 months ago
Centralizing of power always breeds corruption, and if we know anything about inbreeding we shouldn't allow it to happen. 150 years ago when communications were not great and transportation was difficult, it made sense to have a single currency. Today it's better to have local currencies valued at local exchanges in order to support local economies.
aeroseth2k 10 months ago 2
Max looks like a Vulcan.
r4nge 10 months ago
What EB doesn't understand is that Fractional Reserve Banking is never sustainable. She represents a view that advocates the following:
Gov can be good stewards of monetary policy even though it never happened in history.
Fiat money is better than commodity money even though history demonstrates the opposite.
Fractional Reserve Banking is bad, unless the gov does it (really EB?).
Can anyone explain how is it exactly that people take her seriously? Anyone...
jokertim777 11 months ago
@jokertim777 Yeah most economic "experts" have no idea about money and banking. I only had to listen to her for 2 minutes before I realized she has no clue what she's talking about. The only thing worse than fractional reserve bank, is a fractional reserve bank run by the government, (or a zero reserve bank like the fed).
Dziaji 10 months ago
@jokertim777 I don't think her argument was pro fractional practices. In the interview they were talking past one another. I think that she thought she was answering an FDIC related question and not a fractional question. Agreeably she did literaly say "one to one" but really don't think she was answering what she was asked, so much as what she thought she was asked.
mersk100 10 months ago
@mersk100,
I'm not basing my assessment of EB's position on this single interview... I've watched others as well.
You might want to investigate how her "solution" the Bank of North Dakota operates. It is just a mini-Fed that operates on the State level. It doesn't constitute a break from the Fed system at all, in fact they have an account with the Fed and they use Fractional Reserve Lending. It is an anomaly yes... but not one on which to base any real reform movement. Red herring.
jokertim777 10 months ago
@jokertim777 Fair enough :)
mersk100 10 months ago
@jokertim777
They use Fractional Reserve lending.....sure they do, they must, it's a rule sat by the Fed ?
kennjohnsen 10 months ago
reading these comments, helps me to realize. ignorance isnt bliss. damn kids, start paying attention, you cant listen when your heads in your colon.
j7s12 11 months ago
From what these two are saying it sounds like the State in question must have a surplus of cash to launch their own bank.
drewzillasaurusrex 11 months ago
Has the Ben Bernake been there for a loan ?
louis12346 11 months ago
I believe the state can create its own money for highways and projects and not be charged interest. That is one way you keep your taxes down. The Fed charges interest.
dbakken 11 months ago
@dbakken
And how are they going to do that ?
kennjohnsen 11 months ago
This is a step forward but in my mind the creation of credit = the creation of debt. Well, I think I would opt out of debt. Perhaps people need to re-think this whole economy thing from bottom up.
iszoj 11 months ago
Bad guest this week. She doesn't understand our monetary system or fractional reserve banking AT ALL. banks do not create money, only the fed does. The banks create debt. Your checking account is not money, it is debt (an IOU from the bank). The bank keeps 10% of the money it owes you as reserves. Fractional reserve banking is the problem. It is a fraudulent system based on a con game that invariable ends with collapse.
Dziaji 11 months ago
@Dziaji Banks do create money. /watch?v=uzef43gdupk
ih8regs 11 months ago 2
@ih8regs only central banks create money. Other banks just borrow and loan it.
Dziaji 11 months ago
@Dziaji
Hurrah, at last one the understand that.
kennjohnsen 11 months ago
@kennjohnsen Can you help me explain this to these people? I'm obviously not doing a good job.
Dziaji 10 months ago
@Dziaji
I haven't followed the conversation, so I don't know exactly your point of view. But there is a video on YouTube there are talking nonsence about the banks creating money, and to argue against these hard core believers are hopeless.
kennjohnsen 10 months ago
@kennjohnsen thanks for keeping me sane. I'm trying to teach people. They stopped talking so I think they get it now.
Dziaji 10 months ago
@Dziaji Technically they DO create money - When they give out a loan, that money added to the total amount in circulation. Technically it didn't "exist" in the economy until the loan was agreed. Sure, someone else printed it (the federal reserve) and the rest of what you're saying is true, of course. The banks only act as the release mechanism, and the debt is accrued from the interest charged on the loan, which of course was never released - so the national debt just increases over time
CokeSupply 11 months ago
@CokeSupply that is a common misconception. When a bank creates a loan, no money is added to the money supply. You deposit money in the bank, the bank loans most of it out, they create a book entry stating that they now owe you that money. The book entry is not spendable. If you write a check, the bank has to use it's actual reserves to make good on the check, it cannot transfer the book entry to another bank. Therefor the book entry is not "money" because it cannot be spent.
Dziaji 11 months ago
@Dziaji I didn't say that when a bank creates a loan that money is added to the money supply (they can't do that, as they don't have a license to print money whenever they please). What I said was that when a bank creates a loan, the money is added to the total amount in circluation. Please take Juu's advice and spend more time on your arguments, as knocking down a strawman of your own creation is a logical fallacy.
CokeSupply 10 months ago
@CokeSupply When a bank makes a loan, no money is added to the amount of circulation. This is what you don't seem to be understanding. The only time money is added to the amount in circulation is when the fed increases it.
Dziaji 10 months ago
@CokeSupply
No, when a bank create a loan, it does not add to the money supply ( if it's not from the central bank ) it's impossible. These money come from someone else, if I loan you 100 dollars....you have a 100 dollars more....but I have 100 dollars less. so the total money are the same.....must be. Take your own advice and spend a bit more time on your argument.
kennjohnsen 10 months ago
@kennjohnsen
Banks can and do issue their own money, we can't! that's the difference. If it sounds absurd it's because it is!
radicalsquare 10 months ago
@radicalsquare
Central banks issure money, no one else have the right to, that's the difference, any other claims are absurd.
kennjohnsen 10 months ago
@kennjohnsen Again you're obfuscating the point - the money that sits in the vaults in the bank is NOT IN CIRCULATION IF IT IS NOT LENT OUT. If someone wants a loan, THEN the money is put into circulation. You loaning money to me is not the same as a bank loaning money to me. If I don't take your 100 dollars, you will spend it - hence, it was and is in circulation. The money in the bank's vaults DOES NOT CIRCULATE UNLESS LOANED, AND THE INTEREST CHARGED WAS NEVER PRINTED
CokeSupply 10 months ago
@CokeSupply
You are obfuscating the point. Fools here say....you deposit 100 dollars, the bank loans out 90 dollars....someone gets these 90 dollars and deposit 90 dollars.....the bank have increased the money supply with 90 dollars....what rubbish. Don't you think that I know that money in the banks basement is not in circulation ? AND WHAT IS THIS RUBBISH INTEREST IS NOT PRINTED
kennjohnsen 10 months ago
@kennjohnsen I'm not obfuscating the point. I'm just pointing out that you're obfuscating the point by pointing out that things that I'm not pointing out while I was responding to someone else's point. But I would like to point out that you knew that already. What's your point?
CokeSupply 10 months ago
@CokeSupply
Don't remember what is was about exactly.
kennjohnsen 10 months ago
@CokeSupply
What was this.....INTEREST NOT PRINTED.
kennjohnsen 10 months ago
@kennjohnsen Interest is the extra percentage to be paid back on a loan, which the bank did not have to start with. This extra amount is only paid back by money put into circulation by other loans made by other people. If the loan wasn't paid back, then physical goods are used as payment instead (such as your home if you can't afford your mortgage). Eventually we get to the position where we are at today - trillions "owed" to the banks - all made up from interest charges over time
CokeSupply 10 months ago
@CokeSupply
Sure interest is extra percentage on a loan. Interest is paid by the loaner, of his income, got nothing to do with other loans. Other than all money is created as debt. The trillions owed to the banks, is not owed by the bank.
kennjohnsen 10 months ago
@kennjohnsen The loaner got his income from money that only came into circulation by someone asking the bank for a loan in the first place. It didn't grow on a fucking tree!!
CokeSupply 10 months ago
@CokeSupply
No, money do not grow out off the fucking ground, it's all loaned and spended in to circulation by the state or banks. But interest is money there change hands, like if the money was gold, if you loaned an ounce of gold in the bank, the interest would not come from more gold supply, would it.
kennjohnsen 10 months ago
@Dziaji
An exception must be, if the bank take a loan in the central bank, and loan them out, they must increase the money supply, or if a bank take a loan in another currency, they change them in the central bank to local currency, then also they must increase the supply of the lokal currency. Otherwise this that the banks somehow create money, and somehow increase the money supply is obviously rubbish.
kennjohnsen 10 months ago
@kennjohnsen exactly ken! you get what im saying. In the 2 scenarios you just described, the federal reserve is the one creating the extra money and distributing it through the banks. Which is how the system works. The fed creates the money, banks do not create any money through loans.
Dziaji 10 months ago
@Dziaji Money is debt and debt is money watch?v=_doYllBk5No
juujuuuujj 11 months ago
@juujuuuujj money and debt are not the same thing. In the US, money is dollars that can be in digital or paper form. Debt is an agreement for someone to pay someone else dollars. In other words, debt is an "IOU dollars". They are not the same.
Dziaji 11 months ago
@Dziaji Money is not "dollars", it's any accepted form of payment, be it physical currency or virtual debt. The "digital IOU money" you're talking about has another name - debt (a.k.a. credit, including deposits, which are also debt). The "dollar brand" is just the measuring stick by which the value of that debt is calculated, it's not money in and of itself.
juujuuuujj 11 months ago
@juujuuuujj You are very confused, as max's guest is. In the US the dollar is legal tender, it takes 2 forms, digital credits on the federal reserves computer system, and paper dollars. The banks do not create dollars in either form. Only the federal reserve does. Bank deposits are not money. They are an IOU for dollars.
Dziaji 11 months ago
@Dziaji Please, spend more time on your arguments and less time on saying how confused everyone but you is. The "dollar" is just the name of the brand of the currency alone (currency=physical coins and banknotes), and almost all money used for transactions is virtual, i.e. debt. When the Fed increases the number in someone's deposit, it does exactly the same thing as when a bank increases someone's credit. It creates new debt money, but not new currency. Learn the difference between MB and M3.
juujuuuujj 10 months ago
@juujuuuujj
When the fed increase the money, they increase the money supply, and does not do exactly the same as a bank increase someone's credit, this credit is coming from someone else, and have nothing to do with the money supply.
kennjohnsen 10 months ago
@kennjohnsen The difference between "money" and "money supply" is like between "size of economy" and GDP. The latter calculates a very small part of the actual size of the former. The broadest way to calculate money supply, M3 counts large deposits. But deposits are debt, not real currency. Credit is also debt, it's used by banks as collateral and payment (money), except its total size is unknown and it's not part of M3. It's a document of promise, accepted as valuable, and as payment.
juujuuuujj 10 months ago
@juujuuuujj
Hmmmm......in short, my deposit are real currency, and the money in circulation is the money issured by the centran banks, everything is based on money, and only the money issured by the central banks. M3 should be the total money supply.
kennjohnsen 10 months ago
@kennjohnsen Quite the opposite, the deposit itself is just the debt that the bank owes to you, redeemable in currency. The currency itself is a miniature part (about 1/10) of M3. And M3 is just a miniature part of the total money in use, because "money" means any object or record accepted as payment, which includes debt, and the total amount of debt is unknown. Even an illegal IOU drawn on a piece of toilet paper is money, as long as someone accepts it as payment.
juujuuuujj 10 months ago
@Dziaji Also, since you think deposits and debt aren't money, just an "IOU for physical currency", when someone makes a transaction from a deposit to a deposit, and receives a good or service in exchange, what do you think happens? Or when someone buys/sells a bond or derivative in exchange for added debt money in their deposit, and then use their debit or credit card to buy a golden toilet seat, where's the physical currency in that picture? The "dollar" brand is just a yardstick for value.
juujuuuujj 10 months ago
@juujuuuujj I'll explain how this works to you. When someone makes a transaction or buys a bond, the bank has to dip into it's reserves to make good on the IOU. You are not actually spending the deposit. The bank uses it's reserves to convert the amount of your transaction from bank entry deposit in your account, into dollars (paper or electronic form), and then sends those dollars to whatever bank is receiving the money. The bank must then replace those reserves when new deposits come in.
Dziaji 10 months ago
@Dziaji What do you think a bank's "reserves" are? It's people's deposits, i.e. the bank's debt to them, not real currency. A financial transaction is a simple addition and subtraction of debt from one account to another, and actual currency plays no role, except to measure the value of said debt. There's no such term as "IOU dollars", what you're looking for is debt, calculated in dollars. It has nothing to do with the currency itself, except that its stated value us measured in that currency.
juujuuuujj 10 months ago
@juujuuuujj A banks reserves are dollars. Some is in cash in the vault and some is in digital credits on the fed's computers. When there is a bank to bank transaction, dollars are transferred from one bank to another. The banks do not transfer debt to each other, they transfer reserves. Look it up.
Dziaji 10 months ago
@juujuuuujj It's as if you have no understanding of the monetary system and are just talking from your own imagination. a simple wikipedia search on "bank reserves" will teach you
Dziaji 10 months ago
@Dziaji
I don't understand my dollar deposit in a bank is not money, and what does IOU for dollars means.
kennjohnsen 10 months ago
@kennjohnsen When you give the bank $100, it keeps $10 for reserves and loans the other $90 out to other people. It then creates an entry in it's books saying that it owes you $90 and the other $10 is available for you. If you spend say $20 out of your account via check to another bank, your bank has to dig into the reserves of other people's deposits to come up with the additional $10, and replenish it when more deposits come in. If everyone takes out 20%, the bank goes bankrupt.
Dziaji 10 months ago
@Dziaji
No, it does not owe me 90 dollars, it owes me 100 dollars, and all the 100 dollars must be available for me. Sure if there is a run on the bank, the bank have a problem, then they take the problem to the federal reserve, then the federal reserve pump them up with money.
kennjohnsen 10 months ago
@kennjohnsen Its not complicated. Banks have a 10% reserve requirement, meaning they can lend $90 of every $100 you deposit with them. Then, the person who takes that loan pays someone else with the $90 for a house, then that person puts $90 in their bank, who then loans out about $81 which goes to another bank. At the end of the day, there is more money in existence than when you deposited that $100. Its so simple that its hard to grasp, but that is how banks create new money.
TheBullionBull 10 months ago
@TheBullionBull
It seems to be complicated for you, I deposit 100 dollars, the bank loans out 90 dollars.....the bank has 10 dollars.....then someone puts back the 90 dollars.....the bank is back to 100 dollars......not one dollars more in existence. You people should think a bit before you buy this nonsense from this video here on YouTube.
kennjohnsen 10 months ago
@kennjohnsen HAHAHA seriously dude, go read some basic banking literature from the Federal Reserve before you make yourself look even more silly.
TheBullionBull 10 months ago
@TheBullionBull
Seriously dude, use your brain, and think, you make yourself look like a dumbass.
kennjohnsen 10 months ago
@kennjohnsen If you think the money supply is entirely a creation of the Federal Reserve and that banks play no role please just read some very basic introductory banking texts.
TheBullionBull 10 months ago
@TheBullionBull
The banks role is to sell/loan out, the Federal reserve money creation, they don't make money themself.
kennjohnsen 10 months ago
@kennjohnsen You don't know what you're talking about. Person A Deposits $100, bank loans $90 to person B. Person B deposits in another bank or same bank. Checkbook money now totals $190. The functional money supply is increased. $90 was created out of thin air. M1 M2 MZM - Look it up, do your self a favor. Then go buy food and gold like the rest of us that know what the F is going on.
mersk100 10 months ago
@mersk100
You don't know what you are talking about, person A deposits $100.....the bank loans $90 to person B......the bank is down to 10 dollars.....person B deposits the 90 dollars in a bank.....that's 100 dollars, you move 90 dollars from one bank to another, that does not create any money.....does it. You guys should think before you come up with these math, you make yourself look stupid, do you know what the fucking is going on.
kennjohnsen 10 months ago
@kennjohnsen Go look up fractional reserve banking, come back when you understand.
mersk100 10 months ago
@mersk100
You go and look up reserve banking, and stay away until you have. Fractional reserve banking means, the banks must keep a fractional of the deposits in reserve. That's it, stay away until you understand.
kennjohnsen 10 months ago
@kennjohnsen You have the illusion that banks are under the obligation of consideration. When a bank makes a loan, all they do is create an account and credit the account for the amount of the loan. That bank credit now exists as "money" you may spend. The bank calls up the central bank and borrows from them, 10% of what they loaned you, making their reserve.
mersk100 10 months ago
@mersk100
I think they make the loan in the Fed, a little time before they loan them out. 10 % of what they loaned me is their reserve ? no....10 % of my deposit is the reserve.
kennjohnsen 10 months ago
@kennjohnsen This yahoo thing sucks for long discussions. Banks may call the fed at any time and take out a loan from the fed, they take out this loan to cover the reserve requirements of their liabilities. When a person deposits money to a bank, the bank has a liability, when a person borrows from the bank, the bank has a liability. Of all a banks liabilities, they must have 10% cover aka reserves.
mersk100 10 months ago
@mersk100
No, it's only their liability to the depositors, where they have to hold 10 % of the deposits...these rules changes all the time.
kennjohnsen 10 months ago
@kennjohnsen Yes, 10%. If you get a loan for 100, they credit you an account for 100. they go borrow 10% from the central bank - they now have 10% cover on what is now a demand deposit. If you get a loan for a house from bank A, bank A makes an account for you, the house seller gets the check and deposits it to bank B. Bank A pays bank B, bank B now has a demand deposit for the amount of the loan, and borrows 10% from central bank. You pay bank A, your loan is an asset to A. Created & spent
mersk100 10 months ago
@mersk100
Where do you get this 10 % borrowing from the central banks from. They got to keep 10 % of your deposits, they got to have some when the dopositors want some. But that's it, there are nothing about 10 % of the out loan in deposits ? how should, and why should they keep 10 % in deposits of your loan, borrowing in the central bank ? where do you get it from ?
kennjohnsen 10 months ago
@kennjohnsen A loan the bank makes to one person will end up as a deposit for someone else. It could be the same bank or another bank. It does not matter. Functionaly the bank that ends up with the deposit from the loan, must cover the demand account.
This borrowing from the central, by the comercial, is loaned at the "prime rate". I'm sure you've heard this term before.
mersk100 10 months ago
@mersk100
You are trying to play smart, the idea is that they got to keep a fraction of the deposit in reserve, but nothing about a reserve of an out loan. A loan is not a deposit.
Right, if you loan in one bank, and you deposit in another bank, you make a deposit in that bank. A prime rate is a rate sat by the banks, at what they lend to favored customers. It got nothing to do with the Fed, you don't know that, so look it up. The rate the bank has to pay the Fed is called Discount Rate.
kennjohnsen 10 months ago
@kennjohnsen Congrats, you've proven you can do a search.
Now search on "Fractional Reserve Banking Made Easy", an essay done by "Terence Gillespie" and hosted by lew rockwell.
mersk100 10 months ago
@mersk100
You have done a search, it's easy to prove whether the bank produce credit out of thin air, show me the banks books....balance sheet, where it says so. It must be in the books.....right.
kennjohnsen 10 months ago
@kennjohnsen I'll stand by those two essays thanks. Let me know if you've read them.
mersk100 10 months ago
@mersk100
I have seen this video more than one time. If the banks create credit out of the blue, it must be in their books, show me the books, where you can see they loan out money they don't have, then the argument is over.
kennjohnsen 10 months ago
@kennjohnsen Go get the document from the federal reserve smart ass
mersk100 10 months ago
@mersk100
Ahhh....smart ass, I got you there, show me a bank balance sheet there show they loan out money they don't have ?
kennjohnsen 10 months ago
This has been flagged as spam show
@kennjohnsen Oh go read "modern money mechanis", a document produced by the federal reserve. You can find their statement, "The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money." If you've any further doubt that banks create money, please feel free to take the issue up with the federal reserve or any other central bank of your choice.
mersk100 10 months ago
@mersk100
I can hardly believe any bank have written this money mechanise, I haven't read it yet, just had a glance at it. I'll say it's rubbish, the banks multiply the money 10 times ? my ass, show me a bank book where the bank have multiplyed their deposits with 10 times created credit. If so, I'll bend over, and say very sorry about how stupid I am, and you can kick my ass.
kennjohnsen 10 months ago
@kennjohnsen Federal Reserve wrote it, go argue with them
mersk100 10 months ago
@kennjohnsen Oh go read "modern money mechanis", a document produced by the federal reserve. You can find their statement, "The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money." If you've any further doubt that banks create money, please feel free to take the issue up with the federal reserve or any other central bank of your choice.
mersk100 10 months ago
@kennjohnsen Also find the article "The Fractional-Reserve Banking Question" by "Bob Murphy" also on lew rockwell
mersk100 10 months ago
@mersk100
Your buddy Bob Murphy is pulling legs here, I can hardly believe he believe the rubbish he says. As he himself state, Sally get 900 dollars of Billy's 1000 dollars deposit ? so where is the multiplyed credit ? it's rubbish.
kennjohnsen 10 months ago
@kennjohnsen Go argue with him
mersk100 10 months ago
@TheBullionBull The process of fractional reserve banking does not create any money. That's what ken is trying to explain to you. It creates multiple "claims" to the same money, but there is no more money in existance when the bank makes a loan.
Dziaji 10 months ago
@Dziaji That is incorrect. Bank credit is the source of most new money in the economy this is basic stuff here.
TheBullionBull 10 months ago
@Dziaji Question: can these claims be used to trade ? in effect posing as money?
loudandright 10 months ago
@loudandright No they cannot. That is what people have trouble understanding. Just because your banks says they have your $100 on your bank statement, doesn't mean they actually have it. As an example, if i am the only customer of a new bank and i deposit $100, then the bank loans out $90 of my money, then i write a check to my friend for $20, the check will not go through because the bank only has $10. The bank cannot transfer the $90 of debt on it's books to another bank. DEBT IS UNSPENDABLE.
Dziaji 10 months ago
@Dziaji thanks for your reply... it think the concept is starting to dawn on me... Short recap: I give the bank a 100 dollars, from which they use 10 dollars as collateral to create a 90 dollar IOU to a 3rd person. This 3rd person sees this 90 dollar IOU as spendable money, which it is not... So the IOU-money the 3rd person spend is in fact debt. (hence making all our money debt...? right?)
haha i hope i am getting this right.
thx
loudandright 10 months ago
@loudandright Close, the borrower is the one that get's the real, spendable $90, the depositor has waiting for him at the bank, $10 spendable dollars (bank reserves) and an IOU for $90. The depositor can spend no more than $10 dollars out of the account unless the bank draws the reserves from other depositors. In this way a bank uses a pool of reserves to make it appear as if it has grown the money supply when it actually hasn't. It has simply made a bunch of promises that it can't make good on.
Dziaji 10 months ago
@Dziaji Do you know what M1 is, do you know what M2 is, do you know what MZM is, do you know it goes all the way out to M16. Go look it up.
mersk100 10 months ago
@mersk100 yes I am aware of those measurements. What is your point?
Dziaji 10 months ago
@Dziaji You are aware of them, but not aware of their cumulative effect on the money supply, that is the point.
mersk100 10 months ago
@mersk100 Because they aren't part of the money supply. MB measures the money supply. All the other ones include unspendable debt into the number. That's what I've been trying to teach people in this thread. If you can't spend something, It's not money. Think of this debt like a bond. You can't spend a bond, you have to exchange it for money (dollars) and spend those. This is known as a note. It used to be that people used bank notes as money, but since the fed was created we now use fed credit.
Dziaji 10 months ago
@Dziaji Then you do not understand what the money supply is. To you the money supply is "cash". You're wrong.
All money in the current fiat regime is debt. And yes, you can "spend" a bond. You can "spend" anything so long as the party with whom you trade accepts that the "thing" has value.
mersk100 10 months ago
@mersk100
You're wrong, all money is created as debt by the central bank, but it is money is it not.
kennjohnsen 10 months ago
@kennjohnsen Only 10% of the money, or whatever the fractional rules happen to be, is created by the central bank. The rest is created by commercial banks.
mersk100 10 months ago
@mersk100
The 10 % reserve is created by the central bank ?? the rest is created by the commercial banks ?? I think you should look that up.
kennjohnsen 10 months ago
@kennjohnsen This is what you're going to do, play these sophmoric games. You're more intrested in winning an argument than learning something. Have fun with the rest of the sheep.
mersk100 10 months ago
@mersk100
I have learned this money stuff long time ago, it's not about winning, it's about this nonsense that the bank create credit out of nothing.
kennjohnsen 10 months ago
@mersk100 I do understand what the money supply is. Ok try to go to the store with your bond certificate and see if they will give you a gallon of milk and change. Go ahead I'll wait......... Oh it didn't work? They called security on you? thought so. You can't spend a bond. By your definition, apples are money, cause someone might accept apples as payment.
Dziaji 10 months ago
@Dziaji Read my words very carefully, then when you realize your error, get back to me
mersk100 10 months ago
@mersk100 You'll never learn with an attitude like that, money is defined as what is commonly accepted as payment for goods and services. You cannot trade bonds for services. There for they are not money. Bond and debt are more akin to income producing assets than money.
Dziaji 10 months ago
@Dziaji You're either being purposefully obtuse or lack the ability to comprehend what I said. Note I did NOT say that bonds were money. Show me where I said that? I did NOT! Read what I fcking wrote!
Wake the Fck up
mersk100 10 months ago
@mersk100 You said "you can spend a bond" and I am saying, "no you cannot spend a bond because it is not money" and neither is debt. Like a bond, all debt is a promise to pay money. Therefor it makes no sense to look at M3 and other similar measurements because if something is unspendable, why add it to the money supply data. MB is the supply of money, because only the money counted in MB is actual spendable money.
Dziaji 10 months ago
@Dziaji Thank you for SPENDING your time to show us all your sloppy use of words. Also it appears you have no real comprehension of what money is in the modern fiat debt regime. It is no wonder you can not comprehend the concept that banks do indeed create money.
mersk100 10 months ago
@mersk100 I can comprehend why you think they do, but what they create is not actually money. Debt and money are the not the same thing. What makes you think that they are? The fed creates money by digitally crediting banks. The banks transact those credits in digital or paper form. It's not very complicated. Just because the bank says your account has X dollars in it, does not mean the dollars are their waiting for you. Bank runs expose the illusion.
Dziaji 10 months ago
@Dziaji I'll give you the same answer I gave ken, go read modern money mechanics, a document from the federal reserve. It states, "The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money." - You can go argue with them.
mersk100 10 months ago
@mersk100 If that were true, there would be no such thing as a bank run. You seem to be avoiding the act of actually discussing the issue so I'll let you go.
Dziaji 10 months ago
@Dziaji LOL, that's it, run away. I see you refuse to go see the truth from the federal reserve it self. Have fun with your head in the sand.
mersk100 10 months ago
@mersk100 I am the one trying to discuss this but you don't address any of my points. Do you know what a bank run is?
Dziaji 10 months ago
@Dziaji I'm not going to waste time on your red hearrings and attempts to change the subject. Are you going to read the document from the federal reserve or not?
mersk100 10 months ago
@mersk100 I already know all that stuff. I'm an expert, not a beginner. You don't know what a bank run is?
Dziaji 10 months ago
@Dziaji Let's see your credentials mr Expert LOL!
mersk100 10 months ago
@mersk100 Since you don't know what a bank run is i'll explain it to you. A bank run is when a bank runs out of reserves because of too many people withdrawing/spending money out of their accounts. When this happens, all the bank has left is debt and since debt is not money, they go bankrupt. It is very important to understand this. I'll help you learn.
Dziaji 10 months ago
@Dziaji There you go again with your loose use of language and equivocations. Hey Mr Expert, since you're too scared and lazy to go read it here it is, from the fed, "The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money."
You've proven beyond a shadow of a doubt, you've zero idea how fiat debt money works.
Also, waiting to see your credentials
mersk100 10 months ago
@mersk100 My credentials are my understanding. You still don't understand bank runs? Man I just explained it perfectly, this isn't that complicated. Do you have any thoughts of your own or are you going to keep quoting that same false statement. I just explained bank runs to you. Counter the point, or you lose the debate. That's how debates work.
Dziaji 10 months ago
@Dziaji ROFL You equivocate, use strawmans, red herrings and lie. You lost the debate long ago.
mersk100 10 months ago
This has been flagged as spam show
@mersk100 I guess that is you forfeiting. Can't even answer a simple question of what a bank run is.
Dziaji 10 months ago
@mersk100
What's your credentials ?
kennjohnsen 10 months ago
@kennjohnsen I never made the claim to be an expert, so no one cares except people looking for red herrings, like your self.
mersk100 10 months ago
@mersk100
This the bank create create out of the blue, is full of red herrings, it's a red herring.
kennjohnsen 10 months ago
@kennjohnsen LOL that is what this debate is all about and you call the core issue a red herring. Whatever, you're done. Take it up with the fed. Bye
mersk100 10 months ago
@mersk100
You're done, it's a red herring, your claim of bank creating credite is misleading.
kennjohnsen 10 months ago
@kennjohnsen ROFL Bye
mersk100 10 months ago
@mersk100
Think about the impossibility of loaning out something you don't have, good day.
kennjohnsen 10 months ago
@kennjohnsen No kidding, it is absurd, but that is the point. Banks loan something they do not have. Look up the case of "First National Bank of Montgomery V. Jerome Daly" in 1969.
mersk100 10 months ago
@mersk100
I can see the idea that banks create credit out of thin air is pretty widespread, but as I said, it can fairly easy be proven if that is the case or not. It must be in the banks books.
kennjohnsen 10 months ago
@kennjohnsen Go to a bank and ask to see their books. let us know how it turns out
mersk100 10 months ago
@mersk100
That's what you bank money expanding people should do, you make the claims, I don't.
kennjohnsen 10 months ago
@kennjohnsen LOL, get real. You've just entered troll territory.
mersk100 10 months ago
@mersk100
You should get real, you live in a fantasy world, are you trolling. Go and look up a bank balance sheet, I have, and I don't see any money multiplying.
kennjohnsen 10 months ago
@kennjohnsen LOL go away
mersk100 10 months ago
@mersk100
Go away and look up a bank balance sheet, and understand your bank multiplying the money is rubbish, it's so simple to do.
kennjohnsen 10 months ago
@kennjohnsen Go argue with the federal reserve, troll
mersk100 10 months ago
@mersk100
Just looked up a bank books/balance sheet, and they clearly have a larger deposit - capital, their own loan....than their out loan. When you think about it, that's how it must be. Go and look it up yourself, and you will see for yourself how ridiculous this claims are.
kennjohnsen 10 months ago
@kennjohnsen ask any teacher of money & banking at your local community college. They will explain it. It's called the multiplyer effect.
doughtymqan 9 months ago
@doughtymqan
You show me the multiply effect in their books, it must be there, right.
kennjohnsen 8 months ago
@mersk100
If the banks create money it must be in their books, show me the books there proves they created money.
kennjohnsen 10 months ago
@kennjohnsen Yes I know the bank owes you 100 when you put in 100, but it only has 10 of it on hand. the other 90 has to be pulled from the reserves of other people's deposit if you demand more than 10 at any given time.
Dziaji 10 months ago
@Dziaji Economist Bob Murphy explains it fairly simply: mises DOT org/daily/4499
TheBullionBull 10 months ago
@TheBullionBull That is not correct. That article is wrong. The bank does not create new money with a loan. I already told you, it creates multiple claims to the existing money. If sally deposits 1000 dollars, and the bank loans 900 of it to bob, there is still only $1000 in existence. The difference is not sally has a claim to $900 that has been given to bob. Get it?
Dziaji 10 months ago
@TheBullionBull a lot of people struggle with this concept, including good economists. The thing you and them are missing is that bank credit is not money. You cannot spend bank credit. When you write a check from one bank to another, the reserves are transfered, not the bank credits.
Dziaji 10 months ago
Google" Ellen Brown Islamic Banking"
TheJewRegulator 11 months ago
I your using the US dollar you not getting rid of the fed. They are destroying the value of the currency you are forced to use.
chriswroads 11 months ago
Peter Schiff Twisted this girls mind a few months back. She thinks that state banks can just create all the credit they want.
USBankruptcy 11 months ago
@USBankruptcy I don't know where you get your information, however it does not represent any facts that I am aware of. State owned banks fall under US banking law like any other bank.
AuCanary 11 months ago
New Jersey needs to form a bank, that is when we get rid of Christie and his rich tax cut benefactors.
saasaasaa010101 11 months ago
Fractional reserve banking is robbery, although I must agree with this woman its much better as a state owned, all the fractional reserve swindling doesn't go into Bernanke and his cronies pockets.. It goes back into the pockets of the people of the state :)
MadXMax187 11 months ago
5.34 that's not true, as I understand it they can only lend $10 off the $1 you deposit if they deposit that $1 in the central bank, otherwise they have to lend the fraction which is 10 keep ten cents and lend 90 cents.
Borrowing short they lend long, but that's credits not deposits, and I think they again have to deposit that credit in the central bank.
099749 11 months ago
0.50 very cool
099749 11 months ago
Bankers are gonna form "new banks"? And people wonder how this all happend. SMH
eyewitness043 11 months ago
Any fiat currency or banking system using fiat currency, still allows unscrupulous people (bankers and/or politicians) to pilfer its actual value.
butchman1 11 months ago
ND may be doing pretty well at the moment -- but it seems like these new proposed systems are still going to be using FIAT.
So if Bank of ND is going up %20-25 in paper dollars --- it may not matter in a hyperinflationary event and all these state run banks are still going to go down. It just seems like the distributed structure only limits liabilities on the debt.
horlacsd 11 months ago 2
@horlacsd I'm not sure what do you think about the Move to Oregon? Please help me on that if you can. I need to get out of this Trap I'm in here with all these Greedy Banksters...
BabylonsKing 11 months ago
i miss stacey herbert
MrMooseheadbeer 11 months ago
back to the states , back to the constitution, back to the sheriffs and hold them accountable
newstairway1 11 months ago