[Toddsterpatriot]

Yes, you failed.

Any time you want to explain why new loans don't increase M2, I'll be willing to listen.

[AndyJackson]

Any time you want to explain why new loans don't increase M2, I'll be willing to listen.

First, it is not loans that are counted in M2, but rather the flip side, time deposits, and time deposits are subtracted from M2 in creating MZM. A man as smart as you could do that math.

Here is how it works. I take money I have on deposit with a bank and buy an debt instrument, ie,CD. The bank loans the money out to someone else who deposits the cash loaned in an account. My bank is out the MZM that was transferred to you and your bank. Net is zero increase in MZM. That is why it is called MZM.

[groanup]

Any time you want to explain why new loans don't increase M2, I'll be willing to listen.

Do you get the impression he thinks that a banker making a loan goes into the vault and grabs a bag of cash and gives it to the borrower?