thoughtomator
Banned
- Joined
- Jan 5, 2012
- Messages
- 11,267
That's exactly what the video does. At this point you are rapidly becoming a troll and I for one have wasted more time on you than you deserve.
You make your own personal distinction between "money" and fiduciary media created by the banks - which you don't technically consider 'money', and therefore not part of the 'money supply'.
And since we're being semantics sticklers, we're even using the term money very loosely, when referring to it as the reserves created by the Fed - even that's a misnomer, because it is the Treasury that actually creates money, while the Fed creates accounting entries.
For simplicity, one needs only to do the roll really only once, but I did it twice to show that the result is the same after doing it only once.Anyway, if you also notice in my chart, the green cumulative deposit entries for each bank total around $100, while the red bottom-line entry shows a boatload of claims on that same $100 in aggregate reserves - not just a case of Guy A and Guy C; that original deposit whore was had by everyone on the football team.
And, for the sake of simplicity, we could call those two banks the entire closed loop banking system under the Fed. More than two are not required for the sake of illustration.
...is not money.. Fiduciary media
a) They are both fictions.
That's exactly what the video does. At this point you are rapidly becoming a troll and I for one have wasted more time on you than you deserve.
That's not how it works. A bank with $100 of real money on deposit can lend out $1000. Hence Citibank's 11.6% tier 1 capital ratio, pushing within 1.6% of the limit of what the law allows.
There's nothing quite so dangerous as a person who is really truly convinced he understands something he doesn't.
That is gibberish.
Maybe you meant to say, "the cash the depositor DEPOSITS is an asset in favor of the bank." But that's not what you wrote.
Please explain, in your own words, what you imagine the relationship to be between paper currency, demand deposits, and the money supply. Take your time.
Again, Steven, the world is a simple place.
All you have to do is use the monopoly set, create a small banking system, and move little pieces of paper around.
There is no trick up my sleeve here. You can see it for yourself. I know you cannot believe your own eyes, because your brain is so full of crackpottery, you can't make head nor tails of it any more.
But trust your eyes and not the crackpots.
FRN are money. It is not a fiction.
If I sent you $1 million in FRN, you would not stand in your living room and yell "It's all fake!".
You would stand in your living room and yell "Yahoo! I'm rich!"
You seem to have a bizarre definition of money, so allow me to help you (again):
It comes from Mises and it is:
the most desired commodity in the market place.
Gold is not money. You cannot buy groceries with your gold coin.
Now, a debt.
It is not fictitious. Try not paying your debt and see how fictitious the courts will find your debt to be.
But a debt is not money either.
Your little monopoly set is incapable of tracking what passes for more than 90% of money in today's debt-money economy.
All you see are the little colored bills.
No, it could be digits in a computer - it is irrelevant.That's the only real money, by golly, something you can hold in your hand.
The banks didn't create that, and that's all you need to know.
No it does not. It behaves nothing like money.the accounting entries that are all behaving as MONEY.
$1,000 in reserves, but because those reserves got passed around, 90% at a time, and went viral, multiple parties now have $9,000 in deposits.
And the bigger the bank, the more it averages out.
Yep, that's right. It is the concurrence of the withdrawals vs. new deposits vs loan repayments that makes the thing work or break.
But remember, you made a posit that paying off debt shrinks the money supply - and no such thing is true.
Paying off the debt returns cash to the bank, who then can re-loan the money ...or pay back a depositor...(<--hint, this is where a subtraction of the money supply could occur)
It's all cash - most of it digital.Deposits ARE being pulled out, routinely, en masse, but very little of it as cash.
Most of it is check entries against one bank that appear as deposits in other banks -- which the banks then can take to the Fed to clear. Most of it will NEVER be see as cash, and there is a velocity to all of it, as all of those "accounting entries" are behaving and circulating "as cash".
Nonsense.
It is all cash.
What in fact is happening is that the cash -digital or otherwise- is being transferred as cash -digital or otherwise- to another account as a deposit. That deposit then is placed into the bank deposit fund, where it is used to fund loans. Whether it is pieces of colored paper or digital abstractions of the same makes not one wit of difference here. Why you think it does is bizarre.
There is a difference between a record of a transaction (which is NOT money) and the exchange of money IN a transaction.
Me writing down "I gave Steven $100" does not make money.
Me writing down "Steven has a $100 in a tin can" does not make money magically appear in my tin can where I put that piece of paper saying that.
Me giving Steven $100 is $100 of money in Steven's hand (whether by digital transfer or paper).
It's still a fiction, because it's propped up by a fiction. Repeal the legal tender laws and let's see how long its value lasts.
That doesn't make it fiction at all!
Gold is not money for the Polynesians either --- they use Rai stones. So what?
FRN is money right now.
Gold is not money right now.
FRN is money today because you have to pay your taxes in FRN.
Maybe something else would become money if there was no taxes... but so what?
The fundamentals of the banking industry and the fractional reserve system remains unchanged regardless of what is money.
As I said earlier, replace the game with gold coins and run with it and see if something changes.... and as you can guess, nothing does.
If I have a thousand starving rats trapped in a cage, I can dump pretty much any rotten, even poisonous edible into the cage, and it will be the "most desired commodity" in their marketplace. And it will also be no less a fiction.
Nonsense.
It is obviously a flaw in your understanding of what is "money" that is the root of this issue.
Money is not one thing for all time - it has been many things and will be many things in all time. It is a commodity that is the most desired - whether salt to pearls to Rai stones to gold to paper with pictures of dead men to digits in a computer.
But it is not a fiction - unless of course you believe the money you spent to buy food was all fictional....(roll eyes).
Now your normalcy bias is flowing out of your rear end. Gold and silver coins are not "commonly accepted" forms of money, not because they are not money (what a ridiculous notion!), but because it has been demonetized as official currency, and taxed as a commodity enough to prevent it from being in circulation.
They are money, but are not not money even though they have been de-monetized (which means they are not money) but they are still money.... whew! What a spin cycle.
Gold is not money, and it is not necessary to be money.
You can't eat gold like you can't eat digital money either. But gold is not money (but was once money, and maybe again) and FRN are money (but maybe one day won't be). Shrug.
It has absolutely everything to do with value!having nothing to do with value,
Like I exampled, you are the faker if you wouldn't yell "Yahoo!" if you suddenly saw $1 million of digital FRN in your bank account.... you wouldn't be chiming and saying "Nah, its fake...its not gold so it is worthless!". Bullcrap! You'd be out there trading like a mad fool for a new car, a house maybe, a nice vacation.....
...yeah, right... its not money...! hahahahahaha
Tell that to all the people who have $9,000 on deposit between them, deposited into their accounts from loans made from the same $1,000 the banks have in "real money" on deposit with the Fed. In fact, my niece just got a student loan, and is now walking around with "accounting entries" on her debit card. Whatever those entries are, it is not the reserve currency the bank has on deposit with the Fed. Furthermore, she's so stupid, she thinks it's money. And the grocer, he's so stupid, he thinks it's money too. In fact, he's so convinced that those accounting entries in her card are money, that he's willing to give her groceries AND some "cash back" -- in exchange for some of those wonderful accounting entries for the store.
So the whole world is stupid in seeing FRN is money .... except you... you know its fake but you'd have no problem spending it if you had it!
Yep, really fake that money you spent to buy food! hahahahha! whew, no wonder you're a intellectual mess regarding the banking system!
Done with you, BF. Sorry, but I think you're a troll.
Here is what Black Flag does not understand. He believes that banks fail if their are multiple claims on the demand deposits.
Black Flag, you can do better.Steven and gang,
I mean, you guys harp about FRN not being money and gold being money ... as if the system would function differently if gold was the money.
But as the exercise shows, it doesn't make a difference.
So, when you consider that the FED was created in 1913 - the start of the Fractional Reserve - it must be astounding to you to also know that the US was on a gold standard!
...and that the crash in 1929 occurred when the US was on a gold standard! It was on a gold standard until 1936 when FDR seized the gold and replaced it with FRN.
So your ranting about that the system of FRN we have today is the issue (and as a corollary, would not occur if it was "gold") is demonstrably false by fact of history, which dismisses your pet theory of banking as well.
You guys are like a novice chemistry student, proclaiming that hydrogen and oxygen mixed together creates water.
Well, sorry, newbie, it doesn't.
You can mix them for eternity and you will get no water!
...because you need a spark or an ignition source too!
And that's the problem you have - you have a pet theory, and for your theory to work(?!?) you need to label things to be things they are not. This creates different conceptual issues, so you try to fix those issues by making up more things and bizarre declarations like "banks make money out of thin air", which of course anyone with an unpolluted brain would look at you like you are daft ....because it is daft!
When the old chemistry teacher shows how the system works, and its underlying function and form, it confounds your pet theory - and *gasp* you can't have that!
So go ahead, stir away into eternity hoping to get some water, heat and light with all that hydrogen and oxygen.
Black Flag, you can do better.
Coming to this forum and claiming that we should all be able to understand the Federal Reserve System by playing a monopoly game made by Parker Brothers is laughable.
Personally, I find you to be completely confused about what money is, but feel free to rant away anyway.Methinks you guys are confused about the factual circumstances surrounding a deposit.
Show Me. Where have I posted a theory, and how is it crackpottery?What is laughable is you cannot demonstrate your banking system theory without resorting to waving your hands in the air and point to imaginary things.
The FACT that I can demonstrate the fundamental operations and functions of banking by using a physical example demonstrates that your crackpot theory is exactly that - crackpottery.