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To: Toddsterpatriot

One more time, loaning of demand deposits is like counterfeiting. Loaning of demand deposits is not. Reserve requirements have nothing to do with it. In one case the bank is promising to redeem a claim on something it does not have, in the other the depositor VOLUNTARILY gives up his claim for a specified period of time.


51 posted on 11/09/2010 6:54:37 AM PST by getsoutalive
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To: getsoutalive
In one case the bank is promising to redeem a claim on something it does not have

The bank can sell the loan or borrow in the Fed Funds market in order to redeem your deposit. No counterfeiting involved. So what's the problem?

52 posted on 11/09/2010 6:58:21 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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