Posted on 11/12/2013 6:32:25 AM PST by Starboard
Chairman Greenspan: We have a problem trying to define exactly what money is … the current definition of money is not sufficient to give us a good means for controlling the Money Supply … ”
Congressman Paul: Well, if you can’t define money, how can you control the monetary system?
Chairman Greenspan: That’s the problem.
If your scenario were true there would never be any money in any bank.
Sure there would, the 10% reserve requirement.
You seem to think that a person borrows money and that money never sees the inside of a bank until the loan is paid off.
I don't think that at all.
When a person borrows from a bank he pays another person or business that deposits it in their bank. The second bank then lends 90% of that deposit, etc. It all comes full circle and all banks end up with money that is debt somewhere else.
Excellent! So you do understand that no bank lends more than their deposits.
And think of what happens when a person borrows from a bank and pays a person or a business of the same bank. Now the bank ended up raising their deposited funds by the amount of the loan and can loan 90% of the amount of the original loan.
Yes! Two deposits, two loans, both smaller than the deposits that fund them.
That's why it is that there is much more money than there is cash.
Money supply has always been larger than just cash.
If your scenario were true, then cash on hand would equal the amount of money in circulation.
Nope. In my scenario, the real world, you can deposit ten $10 bills and the bank can loan out nine of them. You seem to feel that I can deposit ten $10 bills and the bank can lend out more than ten of them.
Not to mention the capital restraints on banks.
You
just
don't
get
it
Economics is intuition, if you don't have it you just don't have it.
Blaming your bad math on intuition? LOL!
Some people were made to search for solutions to problems, some were made to spend their lives doing nothing but heckling those who search while everything around them crashes. You are the latter. If it weren’t for the pain caused to regular people, I would enjoy watching this system crash just to watch people like you come to the realization that your false god of this Federal Reserve is failing you.
You're the latter.
There is no truth in you.
They say this when they know it will bad, especially under a Dem president.
When a GOP is president, regarless of the economy, they alwasy predict doom and gloom for Xmas.
Journalist are leftist, they can’t help it.
You don’t know how banking works, that’s the truth.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.