[GourmetDan]

"Forget whether you think it's my problem or your problem and let's stick to reality."

There is only 10 oz of gold in the example. If you really think that 15 oz actually exist, I'd say you've got some cognitive challenges.

[semantic]

The crazy thing is, as non-bankers (eg engineers and other educated professionals who re finally taking time to investigate just what the hell is going on) drill further into this crisis, they're discovering that banks don't even lend off of reserves.

Rather, they book both the deposit & asset out of thin air when the loan is made, then go shopping for the incremental reserve. Even better, the reserve itself is typically phantom as well. (Especially if they are a Fed member which has reserves already sitting there that were themselves conjured out of thin air.)

A truly beautiful zero bound system; the only restriction is **confidence**. That's why all efforts have been directed towards re-igniting lending. The game must continue, or all is lost (for them anyway).