To: dollarbull
If the banks acquire an additional $1 in reserves (for instance from the Federal Reserve), deposits will increase by $5. You believe that if a bank gets $1 in reserves as a gift from the Fed that $5 in deposits suddenly appear in the banks accounts? LOL!
Baghdad Bob has nothing on you.
152 posted on
03/13/2008 9:40:11 AM PDT by
Toddsterpatriot
(Why are protectionists so bad at math?)
To: Toddsterpatriot
Todd, you'll have to do some homework and read the entire article. "deposits will increase by $5" is the same as "bank made $5 in new loans on the $1 add'l reserves".
I don't have time to put on an econ 101 course here.
To: Toddsterpatriot; dollarbull
You believe that if a bank gets $1 in reserves as a gift from the Fed that $5 in deposits suddenly appear in the banks accounts? LOL! It already did. The banks turning in their debt as "collateral" (soon to be monetized) must do so because they leveraged their actual capital 10 or 20 to 1 and are getting margin calls. The Fed is simply approving the leverage after the fact instead of before. So it is a fact that the Fed's credit dollar is allowing the existence $10 or $20 in bank credit.
290 posted on
03/13/2008 4:39:05 PM PDT by
palmer
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