[Toddsterpatriot]

Uh, Todd, that was my point, and also the point of the federal reserve bank of st. louis paper that I posted.

Uh, Bull, your point was that $200 billion in T-Bills added to reserves somehow creates $1 trillion in deposits.

Are you agreeing now finally?

That you still don't understand? Yes, I agree that you don't understand. Keep trying.

Let's start a new bank. We'll call it the "dollarbull bank of economic ignorance". Now have the Fed loan this new bank $200 billion in T Bills that DBEI will use as reserves. On day one, how much does this bank have as deposits? How much can they loan?

Walk it thru step by step, slow enough so even Andy and Travis can understand.

Try again?

[dollarbull]

Todd, if you agree that the banking system creates money out of thin air (your words, post 331), and I gave you the fed paper showing how banks "create deposits" (fed's jargon - substitute "loan money into existence", or "create money out of thin air") based on the reserve ratio then what is your disconnect? It seems to me you're just being argumentative to cover the fact that you're trying to change your position w/o admitting it. Either that or you've got the worst case of cognitive dissonance I've ever seen.

Maybe you're sweating your ING and BAC positions with the BSC news out this morning? Take a break and come back in a few days after your head clears.

[palmer]

$200 billion in T-Bills added to reserves somehow creates $1 trillion in deposits.

It does (2T or more), but in the banking system as a whole, not in one bank. The 10% reserve requirement is lowered in special cases (which I would think there are more of at the moment).