Alan Greenspan telling the truth!

[Toddsterpatriot]

How did the deposits get their in the first place?

These creatures called customers bring them to the bank, to open savings and checking accounts and to buy CDs.

Clearly, deposits don't fund loans anywhere near in full

Then how else are loans funded?

Where did the customers money come from? Think about it for a second.

Where did the customers money come from? Think about it for a second.

Mine comes from salary, dividends, stock sales. I could probably come up with more.

Again, go past that. Government deficit spending or commercial bank loans, which both create money.

Okay. So what?

Money comes from, the majority, bank loans. In regards to your examples, the majority of money paid to you came from bank loans! There's simply no way in which customer deposits create the loans. I just can't see it.

There's simply no way in which customer deposits create the loans. I just can't see it

Obviously. I'll keep pointing out your errors until you do.

 

[Toddsterpatriot]

A bank simply "expands their balance sheets" and creates the deposit.

We were talking about reserves. Banks get them when customers make deposits.
These deposits that are created by a bank don't seem to change reserves.

Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created.

I hope the home buyer doesn't try to write a check from that account....unless the bank has reserves from other deposits. Poor guy would bounce the check. The seller might get angry.

Huh? I was pretty sure we shifted to talking about deposits. I'm tired and a little messed up though, so I may have missed something.
Todd, the fed always makes sure banks have adequate reserves, and it's extremely cheap to get reserves right now in the overnight.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

You know the answer already. QE ring a bell? Ever hear Bernie bitch about bank bailouts?

QE involved banks borrowing from the Fed?

Of course not.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

 

[Dovahkiin]

Huh? I'm not following you here, the central bank simply uses keystrokes to add/subtract from reserves. Now, we have a policy where banks have to procure a certain amount in reserves in relation to deposits. (I'm pretty sure..)

Huh? I'm not following you here,

Again, I know.

the central bank simply uses keystrokes to add/subtract from reserves.

Yes, central banks create money from thin air. We're not talking about that, we're talking about commercial banks.

Commercial banks also create money from thin air. It's not hypothetical, the majority of all money originates from bank loans.

the majority of all money originates from bank loans.

Absolutely.

Commercial banks also create money from thin air.

Only if your definition of "thin air" is "customer deposits"

Todd, I don't think you're seeing my point.
You and me know the majority of money comes from bank loans. You know, the money we decide to bring to banks to open our deposits, the money employers give to their employees.. Let's assume that banks use customer deposits as a source.. How?? Are we talking about the money multiplier?

You and me know the majority of money comes from bank loans.

Yup.

Let's assume that banks use customer deposits as a source.. How??

I bring a $1000 deposit. Based on a 10% reserve requirement, the bank can lend $900.
The next bank gets the $900 deposit and can lend $810.
The third bank gets the $810 deposit and can lend $729.
Each bank gets a deposit and uses it to make a new loan.
Each loan is fully funded, nothing created from thin air. Every check clears.

Now you show your scenario where the same events occur.....with no customer deposits.

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money. Other banks in other countries lack these requirements based on my reading, and they do fine. Ok, so what happens when we get to the 12th bank? You see why this sounds silly?

 

[RandallFlagg]

Of course. The government could print one thousand trillion dollars and pay off all its debts and have plenty left over.

The question is who would benefit and who would be harmed.

All forms of government issued currency are liabilities of the government (fed/treasury.) The "national debt" simply looks at bonds.
Now, with that in mind, consider why americans aren't fearing for their lives over reserves/notes/coins..
Also, I don't deal with exaggerated examples. And "paying off" the debt would simply mean converting the bonds back to dollars in accounts at the fed. The governments liability doesn't change. In fact, we're doing this every day already. How? Crediting accounts. Right now, we have a demand problem, and the best way to fix that problem is getting more dollars into the hands of the poor, the engine of prosperity.

Of course the government can always print more money. This will benefit some and hurt others.

The only people harmed if the government stopped letting entities use bonds is people looking to park dollars in a very safe place, and banks would be angry as well.

Not really. Anyone owning dollars or assets denominated in dollars would be harmed.

Please, explain. Deficit hawks have been screaming and crying for years, the burden of proof is on you. I suppose I should ask you this question, since the national debt is never going away (bonds.) How is the national debt harming anybody? It simply represents the savings of various entities in securities. And these people know it's a safe place to park dollars for a tiny bit of interest.

Well then! Since we just keep "printing money" and since we are no longer backed by the gold standard - and since limp-wristed liberals claim that "all is well". So, the next time that I hear "social security is going belly up" I am going to demand a 3000 percent raise on my next SS check - and why the hell not? It's "just paper", right?

Hell, if that's the case, why not make every citizen of the US an overnight millionaire? Why not? It's just paper,right? And screw this idea of raising the minimum wage to $15 per hour!! Hell, let's raise the "minimum" to $85 bucks per hour...its just paper, right?

Alan Greenspan, like idiot liberals, is insane.

 

[Dovahkiin]

Huh? I was pretty sure we shifted to talking about deposits. I'm tired and a little messed up though, so I may have missed something.
Todd, the fed always makes sure banks have adequate reserves, and it's extremely cheap to get reserves right now in the overnight.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

You know the answer already. QE ring a bell? Ever hear Bernie bitch about bank bailouts?

QE involved banks borrowing from the Fed?

Of course not.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

If anything, banks have been getting many benefits..

 

[Dovahkiin]

Where did the customers money come from? Think about it for a second.

Where did the customers money come from? Think about it for a second.

Mine comes from salary, dividends, stock sales. I could probably come up with more.

Again, go past that. Government deficit spending or commercial bank loans, which both create money.

Okay. So what?

Money comes from, the majority, bank loans. In regards to your examples, the majority of money paid to you came from bank loans! There's simply no way in which customer deposits create the loans. I just can't see it.

There's simply no way in which customer deposits create the loans. I just can't see it

Obviously. I'll keep pointing out your errors until you do.

I already accept that banks have to follow requirements put on them by the government. But we both know that the money in the deposits, the majority, comes from commercial bank loans in the first place. Loans are responsible for virtually all deposits.

 

[Dovahkiin]

All forms of government issued currency are liabilities of the government (fed/treasury.) The "national debt" simply looks at bonds.
Now, with that in mind, consider why americans aren't fearing for their lives over reserves/notes/coins..
Also, I don't deal with exaggerated examples. And "paying off" the debt would simply mean converting the bonds back to dollars in accounts at the fed. The governments liability doesn't change. In fact, we're doing this every day already. How? Crediting accounts. Right now, we have a demand problem, and the best way to fix that problem is getting more dollars into the hands of the poor, the engine of prosperity.

Of course the government can always print more money. This will benefit some and hurt others.

The only people harmed if the government stopped letting entities use bonds is people looking to park dollars in a very safe place, and banks would be angry as well.

Not really. Anyone owning dollars or assets denominated in dollars would be harmed.

Please, explain. Deficit hawks have been screaming and crying for years, the burden of proof is on you. I suppose I should ask you this question, since the national debt is never going away (bonds.) How is the national debt harming anybody? It simply represents the savings of various entities in securities. And these people know it's a safe place to park dollars for a tiny bit of interest.

Well then! Since we just keep "printing money" and since we are no longer backed by the gold standard - and since limp-wristed liberals claim that "all is well". So, the next time that I hear "social security is going belly up" I am going to demand a 3000 percent raise on my next SS check - and why the hell not? It's "just paper", right?

Hell, if that's the case, why not make every citizen of the US an overnight millionaire? Why not? It's just paper,right? And screw this idea of raising the minimum wage to $15 per hour!! Hell, let's raise the "minimum" to $85 bucks per hour...its just paper, right?

Alan Greenspan, like idiot liberals, is insane.

We have been crediting accounts/"printing money" for some time now, where's the collapse?
Social security doesn't have a funding problem, the problem we need to focus on is real resources.
The government should indeed increase SS benefits. But 3000 percent? That'll cause wayyy to much demand. Why do you hate businesses? Raising the MW that high will decimate mom and pop stores.

 

[Toddsterpatriot]

Huh? I'm not following you here,

Again, I know.

the central bank simply uses keystrokes to add/subtract from reserves.

Yes, central banks create money from thin air. We're not talking about that, we're talking about commercial banks.

Commercial banks also create money from thin air. It's not hypothetical, the majority of all money originates from bank loans.

the majority of all money originates from bank loans.

Absolutely.

Commercial banks also create money from thin air.

Only if your definition of "thin air" is "customer deposits"

Todd, I don't think you're seeing my point.
You and me know the majority of money comes from bank loans. You know, the money we decide to bring to banks to open our deposits, the money employers give to their employees.. Let's assume that banks use customer deposits as a source.. How?? Are we talking about the money multiplier?

You and me know the majority of money comes from bank loans.

Yup.

Let's assume that banks use customer deposits as a source.. How??

I bring a $1000 deposit. Based on a 10% reserve requirement, the bank can lend $900.
The next bank gets the $900 deposit and can lend $810.
The third bank gets the $810 deposit and can lend $729.
Each bank gets a deposit and uses it to make a new loan.
Each loan is fully funded, nothing created from thin air. Every check clears.

Now you show your scenario where the same events occur.....with no customer deposits.

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money. Other banks in other countries lack these requirements based on my reading, and they do fine. Ok, so what happens when we get to the 12th bank? You see why this sounds silly?

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money.

Yes, banks with deposits can expand their balance sheet and the money supply by making loans.

Other banks in other countries lack these requirements based on my reading, and they do fine.

I don't care how other countries do it.

Ok, so what happens when we get to the 12th bank?

Okay, you tell me.

 

[Toddsterpatriot]

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

You know the answer already. QE ring a bell? Ever hear Bernie bitch about bank bailouts?

QE involved banks borrowing from the Fed?

Of course not.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

If anything, banks have been getting many benefits..

Cool story, bro.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

 

[Dovahkiin]

Commercial banks also create money from thin air. It's not hypothetical, the majority of all money originates from bank loans.

the majority of all money originates from bank loans.

Absolutely.

Commercial banks also create money from thin air.

Only if your definition of "thin air" is "customer deposits"

Todd, I don't think you're seeing my point.
You and me know the majority of money comes from bank loans. You know, the money we decide to bring to banks to open our deposits, the money employers give to their employees.. Let's assume that banks use customer deposits as a source.. How?? Are we talking about the money multiplier?

You and me know the majority of money comes from bank loans.

Yup.

Let's assume that banks use customer deposits as a source.. How??

I bring a $1000 deposit. Based on a 10% reserve requirement, the bank can lend $900.
The next bank gets the $900 deposit and can lend $810.
The third bank gets the $810 deposit and can lend $729.
Each bank gets a deposit and uses it to make a new loan.
Each loan is fully funded, nothing created from thin air. Every check clears.

Now you show your scenario where the same events occur.....with no customer deposits.

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money. Other banks in other countries lack these requirements based on my reading, and they do fine. Ok, so what happens when we get to the 12th bank? You see why this sounds silly?

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money.

Yes, banks with deposits can expand their balance sheet and the money supply by making loans.

Other banks in other countries lack these requirements based on my reading, and they do fine.

I don't care how other countries do it.

Ok, so what happens when we get to the 12th bank?

Okay, you tell me.

The entire point of my argument is that the only thing constraining banks is government requirements. (Capital, etc..)
And as long as a bank is making more on its assets, it'll always loan.
The 12th bank example is for you to think about, since you always leave me without answers.

 

[Toddsterpatriot]

Where did the customers money come from? Think about it for a second.

Mine comes from salary, dividends, stock sales. I could probably come up with more.

Again, go past that. Government deficit spending or commercial bank loans, which both create money.

Okay. So what?

Money comes from, the majority, bank loans. In regards to your examples, the majority of money paid to you came from bank loans! There's simply no way in which customer deposits create the loans. I just can't see it.

There's simply no way in which customer deposits create the loans. I just can't see it

Obviously. I'll keep pointing out your errors until you do.

I already accept that banks have to follow requirements put on them by the government. But we both know that the money in the deposits, the majority, comes from commercial bank loans in the first place. Loans are responsible for virtually all deposits.

I already accept that banks have to follow requirements put on them by the government.

Great. That's not your error.

the money in the deposits, the majority, comes from commercial bank loans in the first place

And the money for the loans, come from deposits in the first place.

Loans are responsible for virtually all deposits.

Virtually, but not all.

 

[Dovahkiin]

You know the answer already. QE ring a bell? Ever hear Bernie bitch about bank bailouts?

QE involved banks borrowing from the Fed?

Of course not.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

If anything, banks have been getting many benefits..

Cool story, bro.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

I don't have the exact number, maybe you can help me out?

 

[Dovahkiin]

Again, go past that. Government deficit spending or commercial bank loans, which both create money.

Okay. So what?

Money comes from, the majority, bank loans. In regards to your examples, the majority of money paid to you came from bank loans! There's simply no way in which customer deposits create the loans. I just can't see it.

There's simply no way in which customer deposits create the loans. I just can't see it

Obviously. I'll keep pointing out your errors until you do.

I already accept that banks have to follow requirements put on them by the government. But we both know that the money in the deposits, the majority, comes from commercial bank loans in the first place. Loans are responsible for virtually all deposits.

I already accept that banks have to follow requirements put on them by the government.

Great. That's not your error.

the money in the deposits, the majority, comes from commercial bank loans in the first place

And the money for the loans, come from deposits in the first place.

Loans are responsible for virtually all deposits.

Virtually, but not all.

Todd, you've literally just admitted that loans are responsible for virtually all deposits. So, here's where it really gets interesting: You're telling me banks are stuck using deposits created by commercial bank loans to fund loans? Think about that... Loans created the initial deposits.

 

[Toddsterpatriot]

the majority of all money originates from bank loans.

Absolutely.

Commercial banks also create money from thin air.

Only if your definition of "thin air" is "customer deposits"

Todd, I don't think you're seeing my point.
You and me know the majority of money comes from bank loans. You know, the money we decide to bring to banks to open our deposits, the money employers give to their employees.. Let's assume that banks use customer deposits as a source.. How?? Are we talking about the money multiplier?

You and me know the majority of money comes from bank loans.

Yup.

Let's assume that banks use customer deposits as a source.. How??

I bring a $1000 deposit. Based on a 10% reserve requirement, the bank can lend $900.
The next bank gets the $900 deposit and can lend $810.
The third bank gets the $810 deposit and can lend $729.
Each bank gets a deposit and uses it to make a new loan.
Each loan is fully funded, nothing created from thin air. Every check clears.

Now you show your scenario where the same events occur.....with no customer deposits.

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money. Other banks in other countries lack these requirements based on my reading, and they do fine. Ok, so what happens when we get to the 12th bank? You see why this sounds silly?

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money.

Yes, banks with deposits can expand their balance sheet and the money supply by making loans.

Other banks in other countries lack these requirements based on my reading, and they do fine.

I don't care how other countries do it.

Ok, so what happens when we get to the 12th bank?

Okay, you tell me.

The entire point of my argument is that the only thing constraining banks is government requirements. (Capital, etc..)
And as long as a bank is making more on its assets, it'll always loan.
The 12th bank example is for you to think about, since you always leave me without answers.

The entire point of my argument is that the only thing constraining banks is government requirements.

Okay. So what?

And as long as a bank is making more on its assets, it'll always loan.

Okay. So what? It still needs deposits for the reserves to fund the loan.

The 12th bank example is for you to think about, since you always leave me without answers

I think if the point helped your case, you'd make it.
The 1st bank can loan $1000*(0.9^1), the 2nd bank $1000*(0.9^2).....the 12th bank $1000*(0.9^12) = $282.43

 

[Toddsterpatriot]

QE involved banks borrowing from the Fed?

Of course not.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

If anything, banks have been getting many benefits..

Cool story, bro.

Todd, the fed always makes sure banks have adequate reserves

How much have banks borrowed from the Fed in the last 5 years?

I don't have the exact number, maybe you can help me out?

Basically nothing, there are trillions in excess reserves from QE sloshing around.

 

[Dovahkiin]

Todd, I don't think you're seeing my point.
You and me know the majority of money comes from bank loans. You know, the money we decide to bring to banks to open our deposits, the money employers give to their employees.. Let's assume that banks use customer deposits as a source.. How?? Are we talking about the money multiplier?

You and me know the majority of money comes from bank loans.

Yup.

Let's assume that banks use customer deposits as a source.. How??

I bring a $1000 deposit. Based on a 10% reserve requirement, the bank can lend $900.
The next bank gets the $900 deposit and can lend $810.
The third bank gets the $810 deposit and can lend $729.
Each bank gets a deposit and uses it to make a new loan.
Each loan is fully funded, nothing created from thin air. Every check clears.

Now you show your scenario where the same events occur.....with no customer deposits.

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money. Other banks in other countries lack these requirements based on my reading, and they do fine. Ok, so what happens when we get to the 12th bank? You see why this sounds silly?

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money.

Yes, banks with deposits can expand their balance sheet and the money supply by making loans.

Other banks in other countries lack these requirements based on my reading, and they do fine.

I don't care how other countries do it.

Ok, so what happens when we get to the 12th bank?

Okay, you tell me.

The entire point of my argument is that the only thing constraining banks is government requirements. (Capital, etc..)
And as long as a bank is making more on its assets, it'll always loan.
The 12th bank example is for you to think about, since you always leave me without answers.

The entire point of my argument is that the only thing constraining banks is government requirements.

Okay. So what?

And as long as a bank is making more on its assets, it'll always loan.

Okay. So what? It still needs deposits for the reserves to fund the loan.

The 12th bank example is for you to think about, since you always leave me without answers

I think if the point helped your case, you'd make it.
The 1st bank can loan $1000*(0.9^1), the 2nd bank $1000*(0.9^2).....the 12th bank $1000*(0.9^12) = $282.43

But banks don't limit their loans like the way you describe in relation to that initial deposit?

 

[Toddsterpatriot]

Okay. So what?

Money comes from, the majority, bank loans. In regards to your examples, the majority of money paid to you came from bank loans! There's simply no way in which customer deposits create the loans. I just can't see it.

There's simply no way in which customer deposits create the loans. I just can't see it

Obviously. I'll keep pointing out your errors until you do.

I already accept that banks have to follow requirements put on them by the government. But we both know that the money in the deposits, the majority, comes from commercial bank loans in the first place. Loans are responsible for virtually all deposits.

I already accept that banks have to follow requirements put on them by the government.

Great. That's not your error.

the money in the deposits, the majority, comes from commercial bank loans in the first place

And the money for the loans, come from deposits in the first place.

Loans are responsible for virtually all deposits.

Virtually, but not all.

Todd, you've literally just admitted that loans are responsible for virtually all deposits. So, here's where it really gets interesting: You're telling me banks are stuck using deposits created by commercial bank loans to fund loans? Think about that... Loans created the initial deposits.

Todd, you've literally just admitted that loans are responsible for virtually all deposits.
For, I don't know, the twelfth time, I've never denied that loans are most of the money supply.
A bank still needs a deposit before it can loan.

You're telling me banks are stuck using deposits created by commercial bank loans to fund loans?

Tell me other sources of funds banks can use to make loans.

 

[Toddsterpatriot]

You and me know the majority of money comes from bank loans.

Yup.

Let's assume that banks use customer deposits as a source.. How??

I bring a $1000 deposit. Based on a 10% reserve requirement, the bank can lend $900.
The next bank gets the $900 deposit and can lend $810.
The third bank gets the $810 deposit and can lend $729.
Each bank gets a deposit and uses it to make a new loan.
Each loan is fully funded, nothing created from thin air. Every check clears.

Now you show your scenario where the same events occur.....with no customer deposits.

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money. Other banks in other countries lack these requirements based on my reading, and they do fine. Ok, so what happens when we get to the 12th bank? You see why this sounds silly?

Todd, your example clearly demonstrates that banks expand their balance sheets and create new money.

Yes, banks with deposits can expand their balance sheet and the money supply by making loans.

Other banks in other countries lack these requirements based on my reading, and they do fine.

I don't care how other countries do it.

Ok, so what happens when we get to the 12th bank?

Okay, you tell me.

The entire point of my argument is that the only thing constraining banks is government requirements. (Capital, etc..)
And as long as a bank is making more on its assets, it'll always loan.
The 12th bank example is for you to think about, since you always leave me without answers.

The entire point of my argument is that the only thing constraining banks is government requirements.

Okay. So what?

And as long as a bank is making more on its assets, it'll always loan.

Okay. So what? It still needs deposits for the reserves to fund the loan.

The 12th bank example is for you to think about, since you always leave me without answers

I think if the point helped your case, you'd make it.
The 1st bank can loan $1000*(0.9^1), the 2nd bank $1000*(0.9^2).....the 12th bank $1000*(0.9^12) = $282.43

But banks don't limit their loans like the way you describe in relation to that initial deposit?

But banks don't limit their loans like the way you describe in relation to that initial deposit?

Excellent. Explain what can get them past that limit.

 

[Contumacious]

Of course. The government could print one thousand trillion dollars and pay off all its debts and have plenty left over.

The question is who would benefit and who would be harmed.

All forms of government issued currency are liabilities of the government (fed/treasury.) The "national debt" simply looks at bonds.
Now, with that in mind, consider why americans aren't fearing for their lives over reserves/notes/coins..
Also, I don't deal with exaggerated examples. And "paying off" the debt would simply mean converting the bonds back to dollars in accounts at the fed. The governments liability doesn't change. In fact, we're doing this every day already. How? Crediting accounts. Right now, we have a demand problem, and the best way to fix that problem is getting more dollars into the hands of the poor, the engine of prosperity.

Of course the government can always print more money. This will benefit some and hurt others.

The only people harmed if the government stopped letting entities use bonds is people looking to park dollars in a very safe place, and banks would be angry as well.

Not really. Anyone owning dollars or assets denominated in dollars would be harmed.

Please, explain. Deficit hawks have been screaming and crying for years, the burden of proof is on you. I suppose I should ask you this question, since the national debt is never going away (bonds.) How is the national debt harming anybody? It simply represents the savings of various entities in securities. And these people know it's a safe place to park dollars for a tiny bit of interest.

U.S. National Debt

When the government spends more than it collects, the result is additional debt. From the signing of the Declaration of Independence in 1776 until 2008, the U.S. accumulated slightly over $10 trillion in federal debt. In the past seven years, the debt has nearly doubled to more than $18 trillion. By the year 2019, it is projected to exceed $20.3 trillion. When interest rates rise, the impact will be felt by the federal government as well as everyday Americans. First, it will increase the government’s cost of borrowing, which will cause the debt to rise even faster. It’s entirely possible that even a modest rise in interest rates could cause the debt to spiral out of control. This is because Washington is heavily dependent on borrowing to operate. Next, it will be much more difficult to expand or even maintain the welfare state. This fact alone will lead to mass riots as individuals who are dependent on a government check will take to the streets in protest.

 

[Dovahkiin]

Money comes from, the majority, bank loans. In regards to your examples, the majority of money paid to you came from bank loans! There's simply no way in which customer deposits create the loans. I just can't see it.

There's simply no way in which customer deposits create the loans. I just can't see it

Obviously. I'll keep pointing out your errors until you do.

I already accept that banks have to follow requirements put on them by the government. But we both know that the money in the deposits, the majority, comes from commercial bank loans in the first place. Loans are responsible for virtually all deposits.

I already accept that banks have to follow requirements put on them by the government.

Great. That's not your error.

the money in the deposits, the majority, comes from commercial bank loans in the first place

And the money for the loans, come from deposits in the first place.

Loans are responsible for virtually all deposits.

Virtually, but not all.

Todd, you've literally just admitted that loans are responsible for virtually all deposits. So, here's where it really gets interesting: You're telling me banks are stuck using deposits created by commercial bank loans to fund loans? Think about that... Loans created the initial deposits.

Todd, you've literally just admitted that loans are responsible for virtually all deposits.
For, I don't know, the twelfth time, I've never denied that loans are most of the money supply.
A bank still needs a deposit before it can loan.

You're telling me banks are stuck using deposits created by commercial bank loans to fund loans?

Tell me other sources of funds banks can use to make loans.

The money created from deficit spending is one possible source. Or they don't use a source at all. (This may not apply to US banks since we have certain requirements though.)