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Another 'I dont understand the banking system' Thread
https://rlfans.com/forums/viewtopic.php?f=11&t=514230		 Page 2 of 2
Author:  SBR [ Sat Nov 26, 2011 8:07 am ]
Post subject:  Re: Another 'I dont understand the banking system' Thread
LeighGionaire wrote:Well people are in complete denial about how money is created, as Galbraith said -


If banks create money how do they run out of it?
Author:  LeighGionaire [ Sat Nov 26, 2011 9:26 am ]
Post subject:  Re: Another 'I dont understand the banking system' Thread
SBR wrote:If banks create money how do they run out of it?


Two reasons -

1) Reserve requirement - there is supposedly a ceiling on how much money they can create depending upon the amount of deposit money they have.

2) They need a borrower's signature to create the money.

Here's a letter from the Bank Of England where they confirm that banks create NEW money when making loans -

http://www.onegoodcut.org/wp-content/up ... eation.jpg
SBR wrote:If banks create money how do they run out of it?


Two reasons -

1) Reserve requirement - there is supposedly a ceiling on how much money they can create depending upon the amount of deposit money they have.

2) They need a borrower's signature to create the money.

Here's a letter from the Bank Of England where they confirm that banks create NEW money when making loans -

http://www.onegoodcut.org/wp-content/up ... eation.jpg
Author:  SBR [ Sat Nov 26, 2011 1:18 pm ]
Post subject:  Re: Another 'I dont understand the banking system' Thread
LeighGionaire wrote:Two reasons -

1) Reserve requirement - there is supposedly a ceiling on how much money they can create depending upon the amount of deposit money they have.

2) They need a borrower's signature to create the money.


No, it's because they have to front up the money 'cos they can't create it. Banks create liquidity not money. Part of the problems at the moment steam not from a lack of money in the economy (there's actually more money as governments, who can create money, have created it) but a lack of liquidity from banks not lending.
Author:  Dally [ Sat Nov 26, 2011 4:56 pm ]
Post subject:  Re: Another 'I dont understand the banking system' Thread
handrags wrote:if that where true wouldnt house prices be at rock bottom ? and if you do default on your morgage the bank would own your house [ still a valuble asset], Yet the yanks owe trillions, and yanks rent property as do most europeans so thats not the simple answer.


Look at property prices in Detroit if you don't think they are rock bottom. In this country all BoE and government policy is aimed at keeping property prices artificially high.

Eg http://www.homes.com/Real_Estate/MI/City/DETROIT/
handrags wrote:if that where true wouldnt house prices be at rock bottom ? and if you do default on your morgage the bank would own your house [ still a valuble asset], Yet the yanks owe trillions, and yanks rent property as do most europeans so thats not the simple answer.


Look at property prices in Detroit if you don't think they are rock bottom. In this country all BoE and government policy is aimed at keeping property prices artificially high.

Eg http://www.homes.com/Real_Estate/MI/City/DETROIT/
Author:  cod'ead [ Sat Nov 26, 2011 5:21 pm ]
Post subject:  Re: Another 'I dont understand the banking system' Thread
Dally wrote:Look at property prices in Detroit


Nice pick.

Have you ever been to Detroit?
Author:  LeighGionaire [ Tue Dec 13, 2011 7:42 pm ]
Post subject:  Re: Another 'I dont understand the banking system' Thread
SBR wrote:
LeighGionaire wrote:Two reasons -

1) Reserve requirement - there is supposedly a ceiling on how much money they can create depending upon the amount of deposit money they have.

2) They need a borrower's signature to create the money.


No, it's because they have to front up the money 'cos they can't create it. Banks create liquidity not money. Part of the problems at the moment steam not from a lack of money in the economy (there's actually more money as governments, who can create money, have created it) but a lack of liquidity from banks not lending.


I've shown you many examples of people stating that banks do indeed create money yet you still refuse to accept it as fact, why is that? What makes you dismiss official bank literature and economists comments that explain that banks can and do inflate the money supply?

Here's another one, Detlev Schlichter an 'Economist who has worked in finance for 20 years including stints at Meryll Lynch and J.P Morgan', talking on The Kaiser Report 13.25 minutes in -

http://www.youtube.com/watch?v=C8FIXhDJ8o0
SBR wrote:
LeighGionaire wrote:Two reasons -

1) Reserve requirement - there is supposedly a ceiling on how much money they can create depending upon the amount of deposit money they have.

2) They need a borrower's signature to create the money.


No, it's because they have to front up the money 'cos they can't create it. Banks create liquidity not money. Part of the problems at the moment steam not from a lack of money in the economy (there's actually more money as governments, who can create money, have created it) but a lack of liquidity from banks not lending.


I've shown you many examples of people stating that banks do indeed create money yet you still refuse to accept it as fact, why is that? What makes you dismiss official bank literature and economists comments that explain that banks can and do inflate the money supply?

Here's another one, Detlev Schlichter an 'Economist who has worked in finance for 20 years including stints at Meryll Lynch and J.P Morgan', talking on The Kaiser Report 13.25 minutes in -

http://www.youtube.com/watch?v=C8FIXhDJ8o0
Author:  LeighGionaire [ Tue Dec 13, 2011 7:46 pm ]
Post subject:  Re: Another 'I dont understand the banking system' Thread
The debt based money system is the prime reason that the gap between the rich and poor consistantly grows wider and wider as explained in this video -

http://www.youtube.com/watch?v=hx16a72j__8
The debt based money system is the prime reason that the gap between the rich and poor consistantly grows wider and wider as explained in this video -

http://www.youtube.com/watch?v=hx16a72j__8
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