moonbat1775's Comments

Celente Flashback: Great Recession Will Maintain Grip for a Generation

Wed, 14 Oct 2009 08:17:42 -0400

All because of an obsolete, crooked banking model invented before 1694.

Silver and Gold Are Money, Not Just a Store of Value

Wed, 01 Apr 2009 18:28:57 -0400

Moonbat will slip in his oar. It turns out, it seems, that an equity-backed money and banking system in which new money is issued at a rate slightly less than the growth in the value of the money backing is stable. The money appreciates at a slight rate as in the case of gold. Though initially, redemptions would be made in gold and shares in the Money Backing, the need for gold would whither away as folks realized that equity is normally stable when based on a stable money and banking system. New Money should only be issued AFTER economic growth and always at a rate less than the growth rate.

FRB issues new money BEFORE growth, which is both dishonest and presumptuous.

And now a rhyme:

FR Bankers

You juggle this, you juggle that,
in your crafty banker's craft.
You loot the poor with fiat.
You know much better?
Is that a fact?

You take their wealth
and give them jobs.
Until you don't!
Sob! Sob!

Will they be ungrateful,
the folks you've robbed?

The Road to Economic Hell

Mon, 09 Mar 2009 14:35:15 -0400

Smarty,
It's good to see you posting again. Your sound thinking is a breath of fresh air.

Both parties should consider:

1. Good ideas do not have to be mandated by government.

2. Bad ideas should especially not be mandated by government.

Too bad politicians can't just be pure passive parasites who left the economy alone other than skim it. Instead they must also try to "help" it.

Pounding the drum, most social and economic evils can be traced to government backed money and banking cartels.

Gold Cannot Be Inflationary, But the Dollar Sure Can

Tue, 20 Jan 2009 15:32:31 -0500

"How does that 'extra' $500,000 ever get removed from circulation? It all got spent building the house, or kept by the builder as profit and became part of the money supply at large.

Is that inflationary? How about if the loan losses amount to trillions of dollars in aggregate? " Smarty

Yes, it normally would lead to price inflation according to MV = PY or P = MV/Y. The inflation was created when the original $1,000,000 loan was made (M = M + $1,000,000). However, as you pointed out, if the net of new FRB loans - repayment of old FRB loans is negative, then M might decrease anyway (M = M - FRB loan repayments).

Yet once again for the benefit of the other folks, the fractional reserve model:

1. Create principal from nothing. This is inflation. The purchasing power of it is stolen from all dollar holders for the sake of the banks, borrowers and governments who tax the phony economic growth.
2. Lend the principal out for interest with IOUs as collateral.
3. As the loans are repaid the principal goes back to nothing. The bank pockets the interest.
4. In the event of default, the money is not destroyed. In addition, new money might be created by new FRB loans to purchase the defaulted collateral.

However, according to MV = PY, or P = MV/Y, the velocity of money (V) as well as aggregate output (Y) also determines the price level (P). Even if M increases, the price level need not rise immediately if people choose to save the new money instead of spending it. As a consequence, even a helicopter drop of new money might end up in saving accounts until such time as public sentiment changes.

Banks Not Lending Anymore? Simply Untrue

Sun, 18 Jan 2009 13:44:38 -0500

" the more I think about it the more the Biblical practice of debt Jubilee makes sense." Smarty

While working on that equity backed money and banking model, I was reminded of several Biblical parallels including zero percent loans between fellow Israelites. However, foreigners could be charged interest. Thus loans to companies wholly owned by a bank's money backing could be considered a "fellow Israelite". The zero interest rate in those cases make perfect sense since the money backing is in effect lending to itself.

Banks Not Lending Anymore? Simply Untrue

Fri, 16 Jan 2009 17:07:41 -0500

Smarty,

"The fox knows many things, but the hedgehog knows one big thing."

You comments have seemed even finer than usual. May God continue to grant you wisdom (and me too, please.) Amen

Banks Not Lending Anymore? Simply Untrue

Fri, 16 Jan 2009 11:33:22 -0500

"Could it be that the entire basis of the economy's "growth" is due to ever accelerating lending and that slowing loan growth rates are resulting in a stagnating economy?" Smarty

The basics of fractional reserve banking are:

1. Create principal from nothing.
2. loan it out for interest
3. As loans are repaid, principal goes back to nothing.

As a consequence, if the amount of new loans is less than the repayment rate of old loans deflation is occurring.

What I Would Do

Thu, 15 Jan 2009 17:59:31 -0500

Allow competing monies and banks. Allow the best ideas to prevail not some government backed banking cartel. And then we would see who understands money best, wouldn't we?

Public Pensions: Rotting from Within

Wed, 14 Jan 2009 15:52:46 -0500

"Since the Shrub (GW) took office it's become entirely blatant. " Smarty

Maybe they actually believe that businessman instead of bureaucrats can turn illegitimate uses of government power into legitimate ones. Does a different rider on the bull in a china shop make that much difference?

There's Unemployment ... And Then There's Unemployment

Mon, 12 Jan 2009 18:28:12 -0500

"The US is going to need to get its act together and figure out how to out produce foreign competition. " Smarty

That answer is simple: economic liberty including this time liberty in money and banking. Let those who depend on government not fight over a shrinking pie but allow American ingenuity to float all boats.

Gold Loses Its Shine

Mon, 12 Jan 2009 18:21:24 -0500

Some would dispute that FRB is a failure or even dishonest if competing banks and monies were allowed. I think it is obsolete but would welcome the chance to compete against it without government favoritism.

Gold Loses Its Shine

Mon, 12 Jan 2009 18:18:31 -0500

When the "modern" fails such as fiat, people will turn to the traditional such as gold. FRB is a failure. Pure fiat could work if for instance only the government could issue it and FRB was banned and/or allowed to be controlled by bank runs with no government backed banking cartel such as the Fed.

Five New Forces to Drive Gold Higher

Fri, 09 Jan 2009 12:52:15 -0500

Gold or fiat,
is there no other way?
Whatever happened
to American creativity?

Take honesty (100% reserve),
add liberty (competing banks and monies),
add creativity (lend to equity)
and for those who can see
you get 100% reserve
equity backed monies.

Target for Inflation: Getting It Right

Fri, 09 Jan 2009 11:29:15 -0500

Consider a money backed by common stocks in certain companies. As those companies prospered the money would increase in value. Now consider that if the bank that issued that money lent it to those companies it would in effect be investing in the value of its own money. So, instead of a stable money as in one backed by gold, we would now have appreciating monies backed by equity. The monies would not be limited in value or quantity since the stock in new companies could be sold to the bank to purchase new money. Click on MyWebsite for an example of such a bank.

One objection raised is that equities are too volatile to be used for backing money. However this is a result of fractional reserve banking (FRB). A stock market based on 100% reserve equity backed monies would be stable and not subject to the deflation inherent in FRB.

The New Normal

Tue, 06 Jan 2009 21:06:54 -0500

"At the end of the day, both inflation and deflation are zero sum games for society as a whole. " prudent investor

Wrong! Both are destructive components of the dishonest fractional reserve banking model. Which:

1. Creates money from nothing and loans it out for interest.
2. Destroys that money as the loans are repaid to prevent runaway inflation. The interest is not destroyed you might notice.

BOTH are destructive. Think of it as a barbed weapon that damages on the way in and on the way out. What would you expect of dishonesty? Do two wrongs make a right?

Is there an honest alternative? Yes. It turns out there is. How surprising. NOT!

Keynes vs. Von Mises

Tue, 06 Jan 2009 13:20:29 -0500

"Creating a finite, inflexible currency is asinine. Where is the universal law of economics which requires your medium of exchange to be a finite number of tokens?" ososry

Well, consider then a 100% reserve money and banking model with money backed by common stock. Money limited in neither amount nor value. Click on My Website for details.

Returning to a Gold Standard Is a Bad Idea

Sat, 03 Jan 2009 21:08:26 -0500

Keynes is down
and Freedman too.
Mises was right.
Rothbard too.
It turns out honesty
is the key.
Who'd of thought
that'd be true?

Perhaps engineers,
who learned to see
that beauty is not truth
but truth has beauty.

Why not mathematicians then?
Why have they failed?
Because they wearied of nature
and on their own paths did sail.

So the humble engineers
who reality can't deny,
turn out in the end
to be wiser than the "wise".

Returning to a Gold Standard Is a Bad Idea

Sat, 03 Jan 2009 18:51:57 -0500

"The Chicago School of thought is that inflation should match GDP growth so the value of money in goods remain constant." Smarty

Here is the problem with FRB business loans. Using MV = PY
where:

M = total money supply
V = dollar transactions per year
P = the price level
Y = aggregate output

When the loan is first made, the business will spend it on investment. It will thus filter down into wages. What will happen to the money next? There are two choices save or spend. Since the money is unbacked, it has no stable value. As Ludvig Von Mises pointed out, there is no reason to believe that the new wages will be saved at a higher rate than the old wages. So let's assume the wages are saved at a 10% rate as usual. The other 90% is spent.

So, using MV = PY. If M increases by deltaM and 10% of that M is saved then PY must increase by 90% of deltaM. Since Y has much more inertia than P, we can assume that all the increase occurs in P. The other 10% of deltaM ends up in savings where it will be recycled into investment loans and then to wages where 10% of 10% = 1% will be saved and so forth. This will increase V by the factor of about (M + .11 deltaM) /M. Since these are real savings and there is no other place to put them, we will allocate them to increased output. So we have:

(M + deltaM)*(M + .11 deltaM)*V/M = (P+.90deltaM)*(M + .11 deltaM)*Y.

So, 90% of the "investment" has just raised prices! Which
leaves 11% (include recycling of real savings) for productivity increases! Which, in a huge irony of honesty, is the exact amount the savers were willing to save in the first place, 10% recycled.

Also, even with FRB, savings should be encouraged to cause real productivity increases.

Returning to a Gold Standard Is a Bad Idea

Sat, 03 Jan 2009 15:40:45 -0500

Banking is slippery.
You nailed that right, my friend.
But clever theft is still just theft
and to honesty will bend.

Returning to a Gold Standard Is a Bad Idea

Sat, 03 Jan 2009 15:23:46 -0500

"If a bank tried to finance every day obligations with Fed Funds, that could be a troublesome sign. Most banks that borrow Fed Funds also lend Fed Funds soon after. " Jim Myrtle

OK Jim, while we slept 1/2 of the US banks merged into the 1st Aggregate Bank of America and the other 1/2 merged into the 2nd Aggregate Bank of America. All of the assets, equity, and liabilities have been added up and are now on two balance sheets. There are now just two US banks. We'll talk about the Fed later maybe. Here they are:

1st Aggregate Bank of America (1st ABA)
Assets:
---IOU's:
-----$9T
Reserves:
----$11T
Total:
----$20T

Liabilities + Equity:
---Equity:
------$1T
---Liabilities
-----$10T Checking Acct. Deposits
------$9T Checking Acct. Loans
Total
---- $20T

So we see that the 1st ABA has lent out 90% of its deposits (9T). The leverage is thus 19/11 = 1.727/1 . This is less than the legal maximum of 1.9/1.

Now the balance sheet for the 2nd Aggregate Bank of America:

2nd Aggregate Bank of America (2nd ABA)
Assets:
---IOU's:
------$4.5T
Reserves
------$6.0T
Total:
----$10.5T

Liabilities + Equity:
---Equity:
---$1.0T
Liabilities:
---$5.0T Checking Acct. Deposits
---$4.5T Checking Acct. Loans
Total:
--$10.5T

The 2nd AGA has lent out 90% of its deposits (4.5T). Its leverage is 9.5/6.0 = 1.58/1. This is less than the legal maximum of 1.9/1.

Now for whatever reason (they are demand accounts, aren't they?) the customers at the 1st AGA decide to withdraw 14T and deposit it with the 2nd AGA. oops! 1st AGA is 3T short. Who is it going to borrow from now Jim? There are no other banks besides the 1st AGA and the 2nd AGA. The money doesn't exist. The 1st AGA created 9T of money from nothing and without another bank to borrow from is exposed as a counterfeiter. What good are the IOUs 1st AGA has? The 2nd AGA wants money not IOUs.

What about the Fed? Sure it can create some money from nothing and lend it to 1st AGA. That's its job, to back up the legalized counterfeiting cartel know as our banking system.

Money from nothing which steals its purchasing power from the public at large.

The White Elephant That Could Destroy Your Portfolio, Part I

Sat, 03 Jan 2009 14:37:16 -0500

"If a bank tried to finance every day obligations with Fed Funds, that could be a troublesome sign. Most banks that borrow Fed Funds also lend Fed Funds soon after. " Jim Myrtle

OK Jim, while we slept 1/2 of the US banks merged into the 1st Aggregate Bank of America and the other 1/2 merged into the 2nd Aggregate Bank of America. All of the assets, equity, and liabilities have been added up and are now on two balance sheets. There are now just two US banks. We'll talk about the Fed later maybe. Here they are:

1st Aggregate Bank of America (1st ABA)
Assets:-------Liabilit... + Equity:
------------------Equi...
---------------------$...
IOU's:----------Liabil...
----$9T-----------$10T Checking Acct. Deposits
---------------------$... Checking Acct. Loans
Reserves:
---$11T
Total:
---$20T----------$20T

So we see that the 1st ABA has lent out 90% of its deposits (9T). The leverage is thus 19/11 = 1.727/1 . This is less than the legal maximum of 1.9/1.

Now the balance sheet for the 2nd Aggregate Bank of America:

2nd Aggregate Bank of America (2nd ABA)
Assets:------------Lia... + Equity:
----------------------...
----------------------...
IOU's:---------------L...
---$4.5T--------------... Checking Acct. Deposits
----------------------... Checking Acct. Loans
Reserves
---$6.0T
Total:
--$10.5T-------------$...

The 2nd AGA has lent out 90% of its deposits (4.5T). Its leverage is 9.5/6.0 = 1.58/1. This is less than the legal maximum of 1.9/1.

Now for whatever reason (they are demand accounts, aren't they?) the customers at the 1st AGA decide to withdraw 14T and deposit it with the 2nd AGA. oops! 1st AGA is 3T short. Who is it going to borrow from now Jim? There are no other banks besides the 1st AGA and the 2nd AGA. The money doesn't exist! The 1st AGA created 9T of money from nothing and without another bank to borrow from is exposed as a counterfeiter. What good are the IOUs 1st AGA has? The 2nd AGA wants money not IOUs.

What about the Fed? Sure it can create some money from nothing and lend it to 1st AGA. That's its job, to back up the legalized counterfeiting ring know as our banking system.

Money from nothing which steals its purchasing power from the public at large.

The White Elephant That Could Destroy Your Portfolio, Part I

Sat, 03 Jan 2009 14:10:08 -0500

1st Aggregate Bank of America (1st ABA)
Assets:------------Lia... + Equity:
----------------------...
----------------------...
IOU's:----------------...
-----$9T--------------... Checking Acct. Deposits
----------------------... Checking Acct. Loans
Reserves:
---$11T
Total:
---$20T---------------...

The White Elephant That Could Destroy Your Portfolio, Part I

Sat, 03 Jan 2009 13:58:28 -0500

format test

1st Aggregate Bank of America (1st ABA)
Assets:-------Liabilit... + Equity:
------------------Equi...
---------------------$...
IOU's:----------Liabil...
-----$9T----------$10T Checking Acct. Deposits
----------------------... Checking Acct. Loans
Reserves:
---$11T
Total:
---$20T----------$20T

U.S. Monetary Policy: Has Anything Changed?

Sat, 03 Jan 2009 13:15:12 -0500

</titl... </head> <body> 1st Aggregate Bank of America (1st ABA) Assets: &... Liabilities + Equity: &a... &a... &a... &a... Equity: &a... &a... &a... &a... &a... $1T IOU's: &n... &a... Liabilities: &a... $9T &a... &a... $10T Checking Acct. Deposits &a... &a... &a... &a... &a... $9T Checking Acct. Loans Reserves: &a... $11T Total: &a... $20T &a... &a... $20T </body> </html> </article> <article> <h1>U.S. Monetary Policy: Has Anything Changed?</h1> Sat, 03 Jan 2009 13:05:19 -0500 4th try: "If a bank tried to finance every day obligations with Fed Funds, that could be a troublesome sign. Most banks that borrow Fed Funds also lend Fed Funds soon after. " Jim Myrtle OK Jim, while we slept 1/2 of the US banks merged into the 1st Aggregate Bank of America and the other 1/2 merged into the 2nd Aggregate Bank of America. All of the assets, equity, and liabilities have been added up and are now on two balance sheets. There are now just two US banks. We'll talk about the Fed later maybe. Here they are: 1st Aggregate Bank of America (1st ABA) Assets: Liabilities + Equity: Equity: $1T IOU's: Liabilities: $9T $10T Checking Acct. Deposits $9T Checking Acct. Loans Reserves: $11T Total: $20T $20T So we see that the 1st ABA has lent out 90% of its deposits (9T). The leverage is thus 19/11 = 1.727/1 . This is less than the legal maximum of 1.9/1. Now the balance sheet for the 2nd Aggregate Bank of America: 2nd Aggregate Bank of America (2nd ABA) Assets: Liabilities + Equity: Equity: $1.0T IOU's: Liabilities: $4.5T $5.0T Checking Acct. Deposits $4.5T Checking Acct. Loans Reserves $6.0T Total: $10.5T $10.5T The 2nd AGA has lent out 90% of its deposits (4.5T). Its leverage is 9.5/6.0 = 1.58/1. This is less than the legal maximum of 1.9/1. Now for whatever reason (they are demand accounts, aren't they?) the customers at the 1st AGA decide to withdraw 14T and deposit it with the 2nd AGA. oops! 1st AGA is 3T short. Who is it going to borrow from now Jim? There are no other banks besides the 1st AGA and the 2nd AGA. The money doesn't exist! The 1st AGA created 9T of money from nothing and without another bank to borrow from is exposed as a counterfeiter. What good are the IOUs 1st AGA has? The 2nd AGA wants money not IOUs. What about the Fed? Sure it can create some money from nothing and lend it to 1st AGA. That's its job, to back up the legalized counterfeiting ring know as our banking system. Money from nothing which steals its purchasing power from the public at large. </article> <article> <h1>U.S. Monetary Policy: Has Anything Changed?</h1> Sat, 03 Jan 2009 12:44:16 -0500 3rd try: "If a bank tried to finance every day obligations with Fed Funds, that could be a troublesome sign. Most banks that borrow Fed Funds also lend Fed Funds soon after. " Jim Myrtle OK Jim, while we slept 1/2 of the US banks merged into the 1st Aggregate Bank of America and the other 1/2 merged into the 2nd Aggregate Bank of America. All of the assets, equity, and liabilities have been added up and are now on two balance sheets. There are now just two US banks. We'll talk about the Fed later maybe. Here they are: -.-.-1st Aggregate Bank of America (1st ABA) Assets:-.-.-.-.-.-.-Li... + Equity -.-.-.-.-.-.-.-.-.-.-.... -.-.-.-.-.-.-.-.-.-.-.... -.-.-.-.-.-.-.-.-.-.-.... IOU's-.-.-.-.-.$9T-.-.... Checking Acct. Deposits -.-.-.-.-.-.-.-.-.-.-.... Checking Acct. Loans Reserves-.-.$11T Total-.-.-.-.$20T-.-.-... So we see that the 1st ABA has lent out 90% of its deposits (9T). The leverage is thus 19/11 = 1.727/1 . This is less than the legal maximum of 1.9/1. Now the balance sheet for the 2nd Aggregate Bank of America: -.-.-2nd Aggregate Bank of America (2nd ABA) Assets:-.-.-.-.-.-.-.L... + Equity -.-.-.-.-.-.-.-.-.-.-.... -.-.-.-.-.-.-.-.-.-.-.... -.-.-.-.-.-.-.-.-.-.-.... IOU's-.-.-.-.$4.5T-.-.... Checking Acct. Deposits -.-.-.-.-.-.-.-.-.-.-.... Checking Acct. Loans Reserves-.-.$6.0T Total-.-.-.-.$10.5T-.-... The 2nd AGA has lent out 90% of its deposits (4.5T). Its leverage is 9.5/6.0 = 1.58/1. This is less than the legal maximum of 1.9/1. Now for whatever reason (they are demand accounts, aren't they?) the customers at the 1st AGA decide to withdraw 14T and deposit it with the 2nd AGA. oops! 1st AGA is 3T short. Who is it going to borrow from now Jim? There are no other banks besides the 1st AGA and the 2nd AGA. The money doesn't exist! The 1st AGA created 9T of money from nothing and without another bank to borrow from is exposed as a counterfeiter. What good are the IOUs 1st AGA has? The 2nd AGA wants money not IOUs. What about the Fed? Sure it can create some money from nothing and lend it to 1st AGA. That's its job, to back up the legalized counterfeiting ring know as our banking system. Money from nothing which steals its purchasing power from the public at large. There once was a goldsmith quite bold who gave paper for storing folks gold. He thought it more fun to issue paper for none and thus his integrity sold. </article> <article> <h1>U.S. Monetary Policy: Has Anything Changed?</h1> Sat, 03 Jan 2009 12:27:53 -0500 2nd try: "If a bank tried to finance every day obligations with Fed Funds, that could be a troublesome sign. Most banks that borrow Fed Funds also lend Fed Funds soon after. " Jim Myrtle OK Jim, while we slept 1/2 of the US banks merged into the 1st Aggregate Bank of America and the other 1/2 merged into the 2nd Aggregate Bank of America. All of the assets, equity, and liabilities have been added up and are now on two balance sheets. There are now just two US banks. We'll talk about the Fed later maybe. Here they are: -----1st Aggregate Bank of America (1st ABA) Assets:-------------Li... + Equity ----------------------... ----------------------... ----------------------... IOU's---------$9T-----... Checking Acct. Deposits ----------------------... Checking Acct. Loans Reserves----$11T Total--------$20T-----... So we see that the 1st ABA has lent out 90% of its deposits (9T) while retaining a 10% reserve which when added to its equity equals a 11T reserve. The leverage is thus 19/11 = 1.727/1 . This is less than the legal maximum of 1.9/1. Now the balance sheet for the 2nd Aggregate Bank of America: -----2nd Aggregate Bank of America (2nd ABA) Assets:--------------L... + Equity ----------------------... ----------------------... ----------------------... IOU's--------$4.5T----... Checking Acct. Deposits ----------------------... Checking Acct. Loans Reserves----$6.0T Total-------$10.5-----... The 2nd AGA has lent out 90% of its deposits (4.5T). Its leverage is 9.5/6.0 = 1.58/1. This is less than the legal maximum of 1.9/1. Now for whatever reason (they are demand accounts, aren't they?) the customers at the 1st AGA decide to withdraw 12T and deposit it with the 2nd AGA. oops! 1st AGA is 1T short. Who is it going to borrow from now Jim? There are no other banks besides the 1st AGA and the 2nd AGA. The money doesn't exist! The 1st AGA created 9T of money from nothing and without another bank to borrow from is exposed as a counterfeiter. What good are the IOUs 1st AGA has? The 2nd AGA wants money not IOUs. What about the Fed? Sure it can create some money from nothing and lend it to 1st AGA. That's its job, to back up the legalized counterfeiting ring know as our banking system. Money from nothing which steals its purchasing power from the public at large. There once was a goldsmith quite bold who gave paper for storing folks gold. He thought it more fun to issue paper for none and thus his integrity sold. </article> <article> <h1>U.S. Monetary Policy: Has Anything Changed?</h1> Sat, 03 Jan 2009 12:18:55 -0500 "If a bank tried to finance every day obligations with Fed Funds, that could be a troublesome sign. Most banks that borrow Fed Funds also lend Fed Funds soon after. " Jim Myrtle OK Jim, while we slept 1/2 of the US banks merged into the 1st Aggregate Bank of America and the other 1/2 merged into the 2nd Aggregate Bank of America. All of the assets, equity, and liabilities have been added up and are now on two balance sheets. There are now just two US banks. We'll talk about the Fed later maybe. Here they are: ----------------------... Aggregate Bank of America (1st ABA) Assets:---------------... + Equity ----------------------... ----------------------... ----------------------... Liabilities IOU's-------------$9T-... Checking Accounts Deposits ----------------------... Checking Account Loans Reserves------$11T Total-------------$20T... So we see that the 1st ABA has lent out 90% of its deposits (9T) while retaining a 10% reserve which when added to its equity equals a 11T reserve. The leverage is thus 19/11 = 1.727/1 . This is less than the legal maximum of 1.9/1. Now the balance sheet for the 2nd Aggregate Bank of America: ----------------------... Aggregate Bank of America (2nd ABA) Assets:---------------... + Equity ----------------------... ----------------------... ----------------------... Liabilities IOU's------------$4.5T... Checking Accounts Deposits ----------------------... Checking Account Loans Reserves-------$6.0T Total-----------$10.5T... The 2nd AGA has lent out 90% of its deposits (4.5T). Its leverage is 9.5/6.0 = 1.58/1. This is less than the legal maximum of 1.9/1. Now for whatever reason (they are demand accounts, aren't they?) the customers at the 1st AGA decide to withdraw 12T and deposit it with the 2nd AGA. oops! 1st AGA is 1T short. Who is it going to borrow from now Jim? There are no other banks besides the 1st AGA and the 2nd AGA. The money doesn't exist! The 1st AGA created 9T of money from nothing and without another bank to borrow from is exposed as a counterfeiter. What good are the IOUs 1st AGA has? The 2nd AGA wants money not IOUs. What about the Fed? Sure it can create some money from nothing and lend it to 1st AGA. That's its job, to back up the legalized counterfeiting ring know as our banking system. "Money from nothing" which steals its purchasing power from the public at large. There once was a goldsmith quite bold who gave paper for storing folks gold. He thought it more fun to issue paper for none and thus his integrity sold. </article> <article> <h1>Returning to a Gold Standard Is a Bad Idea</h1> Sat, 03 Jan 2009 00:34:44 -0500 Smarty, Tomorrow (if the Lord wills and I live) the First (and only) Aggregate Bank of America will be formed from every US bank in the world. </article> <article> <h1>Returning to a Gold Standard Is a Bad Idea</h1> Fri, 02 Jan 2009 23:39:41 -0500 "I understand they can be withdrawn tomorrow. I understand banks borrow from each other overnite (Fed Funds) all the time when reserves drop below required levels or excess reserves are held. " Jim Myrtle What you fail to see is that the need to borrow is an indication of the creation of money and hence theft by inflation. Why should a bank have to borrow money to meet its normal liabilities? </article> </main></body></html>