U.S. Debt Default, Dollar Collapse Altogether Likely [View article]
"When the Fed buys Treasuries it does so specifically to cause long rates to fall, and prices to rise, by increasing demand for them. It does this by printing money and using it to buy Treasuries"
But the Fed hasn't been buying Treasuries over the last year.
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
"Do you really think that $100 put on deposit with a 10% fractional reserve system means that they keep $10 on deposit and loan out $90?"
Yes, but only because I know how to add and subtract. Do you really believe that a single $100 deposit with a 10% reserve requirement allows a bank to loan more than $90?
On Feb 04 11:18 PM Did U Think The Ponzi Scheme Would Last? wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
"Now, if Bank A gets a deposit from me of $1,000 (because I work), and the reserve requirement is 10%, it most certainly can set aside $100 and lend $900, thereby complying with its mandated reserve requirements. Consequently, it has $100 of my initial deposit and has loaned out $900 of same"
Excellent! They loan out less than their deposits. Much better than your initial claim that they can lend out more. I'm so proud (pats DiverCity on head)
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
"If a single bank multiplies its deposits nine times, and that money is deposited in other banks after the loans are exchanged for goods, and those banks multiply those deposits nine times, why don't we have an infinite amount of currency?"
How could a bank ever fail? If a bank is in trouble, it could loan $1,000,000 to another bank, which could loan back $9,000,000 to the original bank. If all the original depositors withdrew their funds, so what?
If George Bailey could do that, the bank run in "It's a Wonderful Life" would have been a non-event.
On Feb 04 12:13 PM BS Detector wrote:
> Let me throw out something for DiverCity and Ponzi, who are saying > things that their anti-fiat currency brethren must be cringing at, > since it does their position harm just from association. > > If a single bank multiplies its deposits nine times, and that money > is deposited in other banks after the loans are exchanged for goods, > and those banks multiply those deposits nine times, why don't we > have an infinite amount of currency? You're describing a geometric > progression. So suppose there's one dollar in the entire economy > on day 1. A bank transforms this into 10 dollars (1 plus the 9 you > say it creates). One dollar stays in the bank, nine go into the world > as loans. The 9 are exchanged for something, and are deposited into > another bank. A week later, the first bank still has 1 dollar, the > second bank has 9 dollars, and 81 dollars are lent out, exchanged > for goods, and deposited at a third bank. A week later, the first > banks still have 10 dollars between them, the third bank keeps 81 > dollars, and creates 729 new dollars which it lends out. > > Do you see where I'm going? At the end of the year, that 1 dollar > would become bank deposits of $417456 followed by 44 zeroes, or 41.75 > trillion trillion trillion trillion. Even if you knock it down to > one lending cycle a month, that one dollar would in one year become > $282.4 billion (with another $2.3 trillion ready to be lent). With > reserve banking in place in America since its founding, and the M2 > money supply at roughly $7 trillion, can you see that this makes > no sense whatsoever? > > Look at it another way. Take a look at a balance sheet. Any balance > sheet, not just a bank. Assets are equal to liabilities plus owners' > equity. right? Now look at a bank's balance sheet. Among other things, > you'll find cash and loans listed as assets, and deposits and other > things listed as liabilities. Now, according to your claim, banks > should have several times as much in assets (loans) as they do in > liabilities (deposits), right? But, of course, they don't. Loans > less current assets are a FRACTION of deposits. > > Wow. You've even seen the right answer on Wikipedia, but chose to > "skip down to the criticism section lest you have to wade through > many paragraphs of Keynesian clap trap..." Keyesianism is clearly > beyond you, but you should take a look at that page and look for > the Money Multiplier section. Read carefully. The truth shall set > you free.
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
"If you are like most Americans and are easily bored, here is the first in a series of simple videos to watch that will explain it: > www.youtube.com/watch?... Each video has a link to the next in the series"
Thanks for the link. In the 2nd video they have a huge mistake. Start at 2:28, they mistake a deposit of investor money at the central bank with high powered money. Only the Fed can create high powered money. Then they imagine, incorrectly, that the bank can "conjure" up $10,000 to loan to a car buyer, without an existing customer deposit.
If you're relying on these error filled videos, you'll never understand how the money supply works.
At about 5:15, they do get one right. Banks must show more on deposit than they have out in loans.
On Feb 04 01:55 AM Did U Think The Ponzi Scheme Would Last? wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
"The smallest word I can use to accurately describe the process is "scam". It works as simply as it sounds: a bank gets $1 on deposit and the grand controller of our money supply, the Federal Reserve, has accounting rules that allow banks to create create 9 more dollars worth of credit out of thin air and to loan that credit out for interest. "
Thanks for trying (and failing) to explain how a bank can lend out more than deposits. Let's try again.
Forget about using words like credit, let's just use cold hard cash. You might be less confused this time.
A new bank has a single deposit of 1000 $1 bills. The reserve requirement is 10%. Please show how it is physically or mathematically possible for the bank to loan out more than $1000 with that single deposit. Walk thru step by step, without frothing, if possible. Good luck!
"The $1 in reserve is a fraction of the credit created, ergo fractional reserve. The hope is that the guy who loaned the original dollar will not come back to withdraw it otherwise the bank becomes insolvent"
Actually, by reserve they mean the bank holds a fraction of deposits aside. That's why they loan less than deposits not multiples of deposits. As far as reserves being less than loans, it's true that loaning 90% and reserving 10% makes reserves less than loans. Just as loans are less than deposits. If you understood simple math, you'd be less prone to conspiracy theory.
Why Record Low Mortgage Rates Don't Signal a Weak Housing Market [View article]
Holding a bond with a 0.5% coupon over the last 10 years means you had 0.5% growth? LOL!
Why Record Low Mortgage Rates Don't Signal a Weak Housing Market [View article]
Sorry, banks cannot borrow from the Fed at 0%. Try 0.75%.
"so the banks have billions on loan from the fed"
Really? How many billions?
Why Aren't Long Term Interest Rates Skyrocketing? [View article]
U.S. Debt Default, Dollar Collapse Altogether Likely [View article]
"This is perhaps one of the most arrogant, stupid responses I have seen in awhile"
Only if you ignore your own comments.
On Feb 09 06:32 AM Did U Think The Ponzi Scheme Would Last? wrote:
U.S. Debt Default, Dollar Collapse Altogether Likely [View article]
Which is why 10 year bonds yield under 3%. LOL!
On Feb 06 07:34 PM popey wrote:
U.S. Debt Default, Dollar Collapse Altogether Likely [View article]
But the Fed hasn't been buying Treasuries over the last year.
On Feb 05 06:53 AM SW Richmond wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
How old were you when you finally failed out of math class? LOL!
On Feb 04 11:56 PM Did U Think The Ponzi Scheme Would Last? wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
I already pointed out a few (huge) errors in that video.
On Feb 04 11:56 PM Did U Think The Ponzi Scheme Would Last? wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
On Feb 04 11:18 PM Did U Think The Ponzi Scheme Would Last? wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
Yes, but only because I know how to add and subtract. Do you really believe that a single $100 deposit with a 10% reserve requirement allows a bank to loan more than $90?
On Feb 04 11:18 PM Did U Think The Ponzi Scheme Would Last? wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
Excellent!
They loan out less than their deposits. Much better than your initial claim that they can lend out more. I'm so proud (pats DiverCity on head)
On Feb 04 05:34 PM DiverCity wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
How could a bank ever fail? If a bank is in trouble, it could loan $1,000,000 to another bank, which could loan back $9,000,000 to the original bank. If all the original depositors withdrew their funds, so what?
If George Bailey could do that, the bank run in "It's a Wonderful Life" would have been a non-event.
On Feb 04 12:13 PM BS Detector wrote:
> Let me throw out something for DiverCity and Ponzi, who are saying
> things that their anti-fiat currency brethren must be cringing at,
> since it does their position harm just from association.
>
> If a single bank multiplies its deposits nine times, and that money
> is deposited in other banks after the loans are exchanged for goods,
> and those banks multiply those deposits nine times, why don't we
> have an infinite amount of currency? You're describing a geometric
> progression. So suppose there's one dollar in the entire economy
> on day 1. A bank transforms this into 10 dollars (1 plus the 9 you
> say it creates). One dollar stays in the bank, nine go into the world
> as loans. The 9 are exchanged for something, and are deposited into
> another bank. A week later, the first bank still has 1 dollar, the
> second bank has 9 dollars, and 81 dollars are lent out, exchanged
> for goods, and deposited at a third bank. A week later, the first
> banks still have 10 dollars between them, the third bank keeps 81
> dollars, and creates 729 new dollars which it lends out.
>
> Do you see where I'm going? At the end of the year, that 1 dollar
> would become bank deposits of $417456 followed by 44 zeroes, or 41.75
> trillion trillion trillion trillion. Even if you knock it down to
> one lending cycle a month, that one dollar would in one year become
> $282.4 billion (with another $2.3 trillion ready to be lent). With
> reserve banking in place in America since its founding, and the M2
> money supply at roughly $7 trillion, can you see that this makes
> no sense whatsoever?
>
> Look at it another way. Take a look at a balance sheet. Any balance
> sheet, not just a bank. Assets are equal to liabilities plus owners'
> equity. right? Now look at a bank's balance sheet. Among other things,
> you'll find cash and loans listed as assets, and deposits and other
> things listed as liabilities. Now, according to your claim, banks
> should have several times as much in assets (loans) as they do in
> liabilities (deposits), right? But, of course, they don't. Loans
> less current assets are a FRACTION of deposits.
>
> Wow. You've even seen the right answer on Wikipedia, but chose to
> "skip down to the criticism section lest you have to wade through
> many paragraphs of Keynesian clap trap..." Keyesianism is clearly
> beyond you, but you should take a look at that page and look for
> the Money Multiplier section. Read carefully. The truth shall set
> you free.
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
first in a series of simple videos to watch that will explain it:
>
www.youtube.com/watch?...
Each video has a link to the next in the series"
Thanks for the link. In the 2nd video they have a huge mistake. Start at 2:28, they mistake a deposit of investor money at the central bank with high powered money. Only the Fed can create high powered money. Then they imagine, incorrectly, that the bank can "conjure" up $10,000 to loan to a car buyer, without an existing customer deposit.
If you're relying on these error filled videos, you'll never understand how the money supply works.
At about 5:15, they do get one right. Banks must show more on deposit than they have out in loans.
On Feb 04 01:55 AM Did U Think The Ponzi Scheme Would Last? wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
On Feb 04 12:13 PM BS Detector wrote:
Turning Japanese: The Audacity of Reality (Part 3 of 3) [View article]
Thanks for trying (and failing) to explain how a bank can lend out more than deposits. Let's try again.
Forget about using words like credit, let's just use cold hard cash. You might be less confused this time.
A new bank has a single deposit of 1000 $1 bills. The reserve requirement is 10%. Please show how it is physically or mathematically possible for the bank to loan out more than $1000 with that single deposit. Walk thru step by step, without frothing, if possible. Good luck!
"The $1 in reserve is a fraction of the credit created, ergo fractional reserve. The hope is that the guy who loaned the original dollar will not come back to withdraw it otherwise the bank becomes insolvent"
Actually, by reserve they mean the bank holds a fraction of deposits aside. That's why they loan less than deposits not multiples of deposits.
As far as reserves being less than loans, it's true that loaning 90% and reserving 10% makes reserves less than loans. Just as loans are less than deposits. If you understood simple math, you'd be less prone to conspiracy theory.