tag:blogger.com,1999:blog-53246864840716464.post7557927749565326952..comments2024-02-29T00:46:38.800-08:00Comments on Washingtons Blog: More Evidence that Banks Create Credit Out of Thin AirUnknownnoreply@blogger.comBlogger7125tag:blogger.com,1999:blog-53246864840716464.post-46186865200727489022010-04-12T00:57:02.969-07:002010-04-12T00:57:02.969-07:00I recently read Richard Werner's "New Par...I recently read Richard Werner's "New Paradigm in Macroeconomics" which discusses these issues with respect to Japan mostly, but very applicable to the US as we seem to be resembling Japan more and more. His ideas seem pretty sensible to me.<br /><br />http://books.google.com/books?id=MIONQgAACAAJAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-53246864840716464.post-23522663385079324542010-03-24T09:06:36.674-07:002010-03-24T09:06:36.674-07:00The bankster monopoly has always been about deflat...The bankster monopoly has always been about deflating the money. They lend money out of thin air but at a rate less than the production of goods. In this way, the money they are repaid is more valuable than the money loaned. see<i> Tragedy and Hope pp 49 et seq</i><br /><br />The problem for us mortal folks is how to generate competing credit so as to escape this deflation.wrafthttps://www.blogger.com/profile/11500342138768626670noreply@blogger.comtag:blogger.com,1999:blog-53246864840716464.post-37203338923764966402010-03-22T01:30:52.051-07:002010-03-22T01:30:52.051-07:00We all "create" money in one way or anot...We all "create" money in one way or another. When a trader makes or buys a good and sells it on at a profit, they have created money. i.e I buy a widget from wholesaler at a dollar and sell for $5 in my store. I have created $4 from thin-air. Same can be said if we are employed. Human energy is based on the intake of food which we then expend during employment. So, at the end of the month I have eaten $200 of food and worked for a pay-check of $1000, I have created $800 from thin-air.<br /><br />Simplistic yes... but the principle is sound. Multiply all these tiny amounts and that is the increase to the global monetary supply. It is possible to reverse this process, for instance when a debt is defaulted on and the money created by that debt has to be wiped, taking an amount OUT of the money supply.<br /><br />So it's not just banks that create money from thin-air, we all do.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-53246864840716464.post-69884274512294849122010-03-18T10:05:27.339-07:002010-03-18T10:05:27.339-07:00I believe that the context in which Friedman expou...I believe that the context in which Friedman expoused a 100% reserve ratio on member bank deposits was as response to eliminating all inflationary pressures. <br /><br />At that juncture these institutions could only lend existing money (which has been saved), and all of these savings would originate outside of these intermediaries. I.e., the member banks would become financial intermediaries (intermediary between saver & borrower). <br /><br />It was also Milton Friedman which expoused that legal reserves were a tax to the commercial banks. But under fractional reserve banking legal reserves are not a tax. An increase in reserves allows the banking system, and its banks, to expand its earning assets by a multiple amount. <br /><br />The expansion in the system's earning assets dwarfs any unearned income on legal reserves. At the same time the Treasury's coffers benefit as well. It's long been a ruse by the bankers and their collaborators.Salmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-53246864840716464.post-89790973421957517982010-03-18T05:24:15.700-07:002010-03-18T05:24:15.700-07:00The “Deutsche Bundesbank” recently published her r...The “Deutsche Bundesbank” recently published her revised booklet “Geld und Geldpolitik” (http://www.bundesbank.de/download/bildung/geld_sec2/geld2_gesamt.pdf)<br /><br />The Bundesbank abandoned completely the old theory of “multiple credit creation”, “fractional reserve banking” and “money multiplier”. (page 88-93).<br /><br />Money is created as book-entry by purchasing assets or entering credits on the left side of the balance-sheet and corresponding deposits on the right side.<br /><br />FESTANvonGELDERN@freenet.deAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-53246864840716464.post-15018778139106554842010-03-17T23:33:04.484-07:002010-03-17T23:33:04.484-07:00Excellent points. In particular point 2 illustrate...Excellent points. In particular point 2 illustrates that taking the correct course of action would not really have been that bad.<br /><br />By not doing this, and using economic theories that are literally backwards from reality to solve the crisis, the country (and the world) have entered scary territory.<br /><br />I also recommend Steve Keen's description of this, at http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/SixWindshttps://www.blogger.com/profile/14559475370598433569noreply@blogger.comtag:blogger.com,1999:blog-53246864840716464.post-54623598064182908502010-03-17T16:52:29.849-07:002010-03-17T16:52:29.849-07:00So can we now say that fractional reserve banking ...So can we now say that fractional reserve banking doesn't exist?The Interesthttp://www.wherestheinterest.comnoreply@blogger.com