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The underlying premise of your argument (and please restate it if I get it wrong) is that savings deposits are lent and therefore an increase in savings reduces the cost of lending which in turn creates the incentive to borrow. Which in turn creates a sort of self-regulating system.
Yes or no?
The underlying premise of your argument (and please restate it if I get it wrong) is that savings deposits are lent and therefore an increase in savings reduces the cost of lending which in turn creates the incentive to borrow. Which in turn creates a sort of self-regulating system.
Yes or no?
No. Never made any claim about the cost of lending.
The underlying premise of your argument (and please restate it if I get it wrong) is that savings deposits are lent and therefore an increase in savings reduces the cost of lending which in turn creates the incentive to borrow. Which in turn creates a sort of self-regulating system.
Yes or no?
No. Never made any claim about the cost of lending.
Do you belive that savings impacts the avilibilty of lendable funds?
The underlying premise of your argument (and please restate it if I get it wrong) is that savings deposits are lent and therefore an increase in savings reduces the cost of lending which in turn creates the incentive to borrow. Which in turn creates a sort of self-regulating system.
Yes or no?
No. Never made any claim about the cost of lending.
Do you belive that savings impacts the avilibilty of lendable funds?
Who can loan more, someone with lots of savings or someone with none?
The underlying premise of your argument (and please restate it if I get it wrong) is that savings deposits are lent and therefore an increase in savings reduces the cost of lending which in turn creates the incentive to borrow. Which in turn creates a sort of self-regulating system.
Yes or no?
No. Never made any claim about the cost of lending.
Do you belive that savings impacts the avilibilty of lendable funds?
Who can loan more, someone with lots of savings or someone with none?
A person can loan money only if they have money. But banks create the "funds" they loan out of thin air, by expanding their balance sheets. And it can all happen without reserves or other hard currency.
In a system with no central bank/treasury, the bank simply marks up borrower's account, and holds the promissory note on their asset side. For bank-to-bank transactions (settling up), banks used to create settlement accounts; Bank A gives Bank B an account balance of, say, $50,000, and Bank B does the same for Bank A. Assets and liabilities all equal out. So "funding" for bank loans simply comes from thin air.
In our present system, central bank-created reserves merely serve as settlement funds, taking the place of bank-to-bank credit.
The underlying premise of your argument (and please restate it if I get it wrong) is that savings deposits are lent and therefore an increase in savings reduces the cost of lending which in turn creates the incentive to borrow. Which in turn creates a sort of self-regulating system.
Yes or no?
No. Never made any claim about the cost of lending.
Do you belive that savings impacts the avilibilty of lendable funds?
Who can loan more, someone with lots of savings or someone with none?
A person can loan money only if they have money. But banks create the "funds" they loan out of thin air, by expanding their balance sheets. And it can all happen without reserves or other hard currency.
In a system with no central bank/treasury, the bank simply marks up borrower's account, and holds the promissory note on their asset side. For bank-to-bank transactions (settling up), banks used to create settlement accounts; Bank A gives Bank B an account balance of, say, $50,000, and Bank B does the same for Bank A. Assets and liabilities all equal out. So "funding" for bank loans simply comes from thin air.
In our present system, central bank-created reserves merely serve as settlement funds, taking the place of bank-to-bank credit.
A person can loan money only if they have money. But banks create the "funds" they loan out of thin air, by expanding their balance sheets. And it can all happen without reserves or other hard currency.
Sure. And?
So "funding" for bank loans simply comes from thin air.
Can you loan me $100,000 in thin air funds from the JohnfrmCleveland bank?
In our present system, central bank-created reserves merely serve as settlement funds
Does the JohnfrmCleveland bank have $100,000 in reserves?
I'd like to be able to cash your loan check.
No. Never made any claim about the cost of lending.
Do you belive that savings impacts the avilibilty of lendable funds?
Who can loan more, someone with lots of savings or someone with none?
A person can loan money only if they have money. But banks create the "funds" they loan out of thin air, by expanding their balance sheets. And it can all happen without reserves or other hard currency.
In a system with no central bank/treasury, the bank simply marks up borrower's account, and holds the promissory note on their asset side. For bank-to-bank transactions (settling up), banks used to create settlement accounts; Bank A gives Bank B an account balance of, say, $50,000, and Bank B does the same for Bank A. Assets and liabilities all equal out. So "funding" for bank loans simply comes from thin air.
In our present system, central bank-created reserves merely serve as settlement funds, taking the place of bank-to-bank credit.
A person can loan money only if they have money. But banks create the "funds" they loan out of thin air, by expanding their balance sheets. And it can all happen without reserves or other hard currency.
Sure. And?
So "funding" for bank loans simply comes from thin air.
Can you loan me $100,000 in thin air funds from the JohnfrmCleveland bank?
In our present system, central bank-created reserves merely serve as settlement funds
Does the JohnfrmCleveland bank have $100,000 in reserves?
I'd like to be able to cash your loan check.
If I were a bank, I could loan you $100,000. And I could also print up $100,000 in banknotes for you, while marking down your account (same liabilities to the bank). And if I needed more settlement funds, I could always sell your loan to another bank and make a profit on the deal, or simply expand settlement accounts with your bank. All without hard currency from elsewhere.
If you are talking about our present system, I would just sell your loan.
Do you belive that savings impacts the avilibilty of lendable funds?
Who can loan more, someone with lots of savings or someone with none?
A person can loan money only if they have money. But banks create the "funds" they loan out of thin air, by expanding their balance sheets. And it can all happen without reserves or other hard currency.
In a system with no central bank/treasury, the bank simply marks up borrower's account, and holds the promissory note on their asset side. For bank-to-bank transactions (settling up), banks used to create settlement accounts; Bank A gives Bank B an account balance of, say, $50,000, and Bank B does the same for Bank A. Assets and liabilities all equal out. So "funding" for bank loans simply comes from thin air.
In our present system, central bank-created reserves merely serve as settlement funds, taking the place of bank-to-bank credit.
A person can loan money only if they have money. But banks create the "funds" they loan out of thin air, by expanding their balance sheets. And it can all happen without reserves or other hard currency.
Sure. And?
So "funding" for bank loans simply comes from thin air.
Can you loan me $100,000 in thin air funds from the JohnfrmCleveland bank?
In our present system, central bank-created reserves merely serve as settlement funds
Does the JohnfrmCleveland bank have $100,000 in reserves?
I'd like to be able to cash your loan check.
If I were a bank, I could loan you $100,000. And I could also print up $100,000 in banknotes for you, while marking down your account (same liabilities to the bank). And if I needed more settlement funds, I could always sell your loan to another bank and make a profit on the deal, or simply expand settlement accounts with your bank. All without hard currency from elsewhere.
If you are talking about our present system, I would just sell your loan.
And I could also print up $100,000 in banknotes for you
B of A can't print banknotes, why can you?
And if I needed more settlement funds, I could always sell your loan to another bank
You'd better sell it quickly, I'm walking the check over to B of A right after I leave your bank.
If you are talking about our present system, I would just sell your loan.
That's right, because you need reserves.
Who can loan more, someone with lots of savings or someone with none?
A person can loan money only if they have money. But banks create the "funds" they loan out of thin air, by expanding their balance sheets. And it can all happen without reserves or other hard currency.
In a system with no central bank/treasury, the bank simply marks up borrower's account, and holds the promissory note on their asset side. For bank-to-bank transactions (settling up), banks used to create settlement accounts; Bank A gives Bank B an account balance of, say, $50,000, and Bank B does the same for Bank A. Assets and liabilities all equal out. So "funding" for bank loans simply comes from thin air.
In our present system, central bank-created reserves merely serve as settlement funds, taking the place of bank-to-bank credit.
A person can loan money only if they have money. But banks create the "funds" they loan out of thin air, by expanding their balance sheets. And it can all happen without reserves or other hard currency.
Sure. And?
So "funding" for bank loans simply comes from thin air.
Can you loan me $100,000 in thin air funds from the JohnfrmCleveland bank?
In our present system, central bank-created reserves merely serve as settlement funds
Does the JohnfrmCleveland bank have $100,000 in reserves?
I'd like to be able to cash your loan check.
If I were a bank, I could loan you $100,000. And I could also print up $100,000 in banknotes for you, while marking down your account (same liabilities to the bank). And if I needed more settlement funds, I could always sell your loan to another bank and make a profit on the deal, or simply expand settlement accounts with your bank. All without hard currency from elsewhere.
If you are talking about our present system, I would just sell your loan.
And I could also print up $100,000 in banknotes for you
B of A can't print banknotes, why can you?
And if I needed more settlement funds, I could always sell your loan to another bank
You'd better sell it quickly, I'm walking the check over to B of A right after I leave your bank.
If you are talking about our present system, I would just sell your loan.
That's right, because you need reserves.
Before we had the Fed, banks printed their own banknotes. Portable liabilities of the bank, not any different than an account balance.
You only need reserves for settlement, and you only need reserves at all because that is the legal system we have set up. That was the whole point of the theoretical argument - to demonstrate that banks don't fund loans with reserves, they fund them with credit. In the real world, banks aren't making large, one-way transfers like that, they are only settling up the net of many, many interbank transactions. And in countries with no regulatory reserve requirement, like Canada, banks only need enough reserves to settle up.
You constantly take the part for the whole. The account, as a lump sum, is rarely on demand. The bank can make profitable use of most of it for a significant amount of time. The bank is in effect a co-depositor.Does that mean the bank is more likely to give a motgage to someone whose homebuilder or original owner also has an account at that bank?
Not at all, though, if the borrower and the seller have accounts at the same bank, that's definitely good for the bank, but given the on-demand nature of bank accounts, the bank has little incentive to favor this arrangement.
You constantly take the part for the whole. The account, as a lump sum, is rarely on demand. The bank can make profitable use of most of it for a significant amount of time. The bank is in effect a co-depositor.Does that mean the bank is more likely to give a motgage to someone whose homebuilder or original owner also has an account at that bank?
Not at all, though, if the borrower and the seller have accounts at the same bank, that's definitely good for the bank, but given the on-demand nature of bank accounts, the bank has little incentive to favor this arrangement.
"Free Market" Means That Those Who Control a Market Are Free to Do Whatever They WantWhat are you after? What Greedhead oinkonomics do you want us to submit ourselves to? You seem to be condemning the banks' accounting practices and leading up to suggesting some self-serving alternative.
I'm not "after" anything. I enjoy conversations on the topic. If I'm "after" anything it's sharing what I know and learning what other people believe. If someone disagrees then I hope for a good debate where, either I learn something or I share what I know.
For one thing, "fiat" is a dishonest word sneaked into econobabble so that some snake-oil speculator can scare suckers into paying ever higher prices for his urine-colored rocks. Gold itself is a fiat currency, but scam artists know how to monopolize a term in order to give it the meaning most profitable to themseves.
While I agree with you that gold is really, when you stop and think about it, a "fiat" currency. What makes gold unique is the number of people that agree it has value across almost every country on earth (if not all of them). No one has to enforce golds value, people just accept it.
Now the term fiat simply means that its value is determined by proclamation. In the case of gold, people proclaim to themselves that gold is valuable (which is why people hoard it because they know others find value in it), but in the case of a paper dollar, its value has to be enforced.
Of course, there are soooo many goods and services that can be purchased with a dollar we don't generally think of it like this. Many users of the dollar don't even think about the kinds of conversations we're having here. They simply take it for granted that dollars have value. How do they know? because then they go in Walmart there is $20 million dollars worth of crap they can trade their dollars for.
At the end of the day, the dollars are fiat because of the creator of those dollars, the US government no longer promises to trade those dollars for anything (other than perhaps to make change) or top satisfy your payments in the taxes it imposes on you.
I think the value of the dollar is derived extrinsically. Its value comes from what can be obtained with it, not in the thing itself (though too many people treat the dollar as intrinsically valuable).
For example, what is the value of a key? Let's say the key is actually a plastic card. If you had 1 ton of those cards it would cost you money to dispose of them. But what if that card was the key to a lock and you needed it to get out of a room. A room you could never escape from without that card?
The value of that key, at least for you, would be equal to how much you value your life.
So what about the dollar? (here is how dollar fiat differs from gold fiat)
The US government imposes taxes. If the dollar didn't buy anything, what would the value of the dollar be then?
If the government could still enforce a tax and the penalty for non-payment was a loss of dollars, a loss of property or a loss of freedom, you would value the dollar equal to your desire to avoid punishment (implicit in that statemnt is a belief that you could not stop the government from carrying out it's punishment).
Thus if the government made jobs available so that you could earn dollars to pay your tax, you would work for those dollars relative to your desire to avoid punishment. Now you might decide not to earn the dollars and fight the government, but that just means that you no longer see the governments threat of force as capable of enforcing the value of the dollar.
Make sense?
"Free Market" Means That Those Who Control a Market Are Free to Do Whatever They WantWhat are you after? What Greedhead oinkonomics do you want us to submit ourselves to? You seem to be condemning the banks' accounting practices and leading up to suggesting some self-serving alternative.
I'm not "after" anything. I enjoy conversations on the topic. If I'm "after" anything it's sharing what I know and learning what other people believe. If someone disagrees then I hope for a good debate where, either I learn something or I share what I know.
For one thing, "fiat" is a dishonest word sneaked into econobabble so that some snake-oil speculator can scare suckers into paying ever higher prices for his urine-colored rocks. Gold itself is a fiat currency, but scam artists know how to monopolize a term in order to give it the meaning most profitable to themseves.
While I agree with you that gold is really, when you stop and think about it, a "fiat" currency. What makes gold unique is the number of people that agree it has value across almost every country on earth (if not all of them). No one has to enforce golds value, people just accept it.
Now the term fiat simply means that its value is determined by proclamation. In the case of gold, people proclaim to themselves that gold is valuable (which is why people hoard it because they know others find value in it), but in the case of a paper dollar, its value has to be enforced.
Of course, there are soooo many goods and services that can be purchased with a dollar we don't generally think of it like this. Many users of the dollar don't even think about the kinds of conversations we're having here. They simply take it for granted that dollars have value. How do they know? because then they go in Walmart there is $20 million dollars worth of crap they can trade their dollars for.
At the end of the day, the dollars are fiat because of the creator of those dollars, the US government no longer promises to trade those dollars for anything (other than perhaps to make change) or top satisfy your payments in the taxes it imposes on you.
I think the value of the dollar is derived extrinsically. Its value comes from what can be obtained with it, not in the thing itself (though too many people treat the dollar as intrinsically valuable).
For example, what is the value of a key? Let's say the key is actually a plastic card. If you had 1 ton of those cards it would cost you money to dispose of them. But what if that card was the key to a lock and you needed it to get out of a room. A room you could never escape from without that card?
The value of that key, at least for you, would be equal to how much you value your life.
So what about the dollar? (here is how dollar fiat differs from gold fiat)
The US government imposes taxes. If the dollar didn't buy anything, what would the value of the dollar be then?
If the government could still enforce a tax and the penalty for non-payment was a loss of dollars, a loss of property or a loss of freedom, you would value the dollar equal to your desire to avoid punishment (implicit in that statemnt is a belief that you could not stop the government from carrying out it's punishment).
Thus if the government made jobs available so that you could earn dollars to pay your tax, you would work for those dollars relative to your desire to avoid punishment. Now you might decide not to earn the dollars and fight the government, but that just means that you no longer see the governments threat of force as capable of enforcing the value of the dollar.
Make sense?
You're preaching still more Lizardtarian dogma when you claim that people make an independent judgment that gold has more value than government-fiat currency. The private-sector oligarchy creates that delusion. The thought-control artists rely on the psychology that people don't want to admit that they are suckers.
The tamed masses are even manipulated into looking down on those who admit they've been deceived. For example, Mitt Romney's Daddy lost his own chance at the Presidency when he said he had been brainwashed about Vietnam.
You should study Federal funds purchased and Federal funds sold.I'm not going to sugar coat things for you, but I assure you in advance that my tone towards you is not meant to be aggressive or disrespectful. One of the limitations of this form of communication. looking forward to good conversations on the topic of economics.
Cheers
E4E1
I know everyone isn't from the US, but this conversation is largely pointed at those in the US, though much of what I say will, to some degree apply in nations like Canada, Japan, UK and Australia.
So does anyone know where banks get the money they lend to people? I'm fascinated how few people, including people that work at banks, actually know the answer to this question.
Let's have a little "fun" and see how many people enjoy a good conversation out the economy.
-Cheers
So does anyone know where banks get the money they lend to people?
Deposits.
This is the response I get from most people. This is what happens when the economy changes but school and college curriculums aren't updated.
So, no, loans do not come from deposits. This is why I was trying to get you to answer the savings question in the other thread (which you responded to me with a Misis article).
Fact, banks don't lend deposits to customers.
Evidence:
Standard and Poors Cheif global economist
Here's a paper from the Bank of England
Fractional Reserve Banking, at least how most Austrians understand it, ended in 1934 when convertibility to gold ended. The fact that most Austrians stubbornly refuse to acknowledge this is amazing and completely undermines the Austrian theory of economics.
Todd, everything you think you know about the economy is rooted in this idea and it's an idea that completely vanished in 1974 when the fiat standard was adopted.
You believe that saving supports lending and investment.
This is wrong. Savings does not support investment, investment supports savings.
Example. I bought my house. It is an investment, but no one's savings made it (see linked articles for evidence and understanding) possible . However, when I borrowed the money from a bank (that created the money it lent me out of thin air) and paid it to the previous owner, the seller took what was left after they paid off the house and deposited it as savings. See how that works? My investment supported their savings.
Think about it. How many people make large investments with cash? Some but most investments made via borrowing and that investment creates savings.
So what happens to the money you deposit at a bank?
Simple, 100% of it becomes bank reserves. Not 10%, not 3%, 100%.
Where does a bank get money to lend to customers?
Banks create it out of thin air. Simple keystrokes on a keyboard.
How does this happen?
Because the bank takes your approved loan and deposits it as an asset. An asset worth the value of the loan plus interest, minus the money created and lent. The bank profits from the interest and when you repay your loan, the bank uses that to zero out the cash it created.
So if you take a loan for $1, the bank deposits your loan (the note) as an asset for $1 and then creates and gives you $1. The bank expects you to return with it's dollar plus some interest which it keeps.
Did you just fall off the wagon or did someone else push you off it ??"Free Market" Means That Those Who Control a Market Are Free to Do Whatever They WantWhat are you after? What Greedhead oinkonomics do you want us to submit ourselves to? You seem to be condemning the banks' accounting practices and leading up to suggesting some self-serving alternative.
I'm not "after" anything. I enjoy conversations on the topic. If I'm "after" anything it's sharing what I know and learning what other people believe. If someone disagrees then I hope for a good debate where, either I learn something or I share what I know.
For one thing, "fiat" is a dishonest word sneaked into econobabble so that some snake-oil speculator can scare suckers into paying ever higher prices for his urine-colored rocks. Gold itself is a fiat currency, but scam artists know how to monopolize a term in order to give it the meaning most profitable to themseves.
While I agree with you that gold is really, when you stop and think about it, a "fiat" currency. What makes gold unique is the number of people that agree it has value across almost every country on earth (if not all of them). No one has to enforce golds value, people just accept it.
Now the term fiat simply means that its value is determined by proclamation. In the case of gold, people proclaim to themselves that gold is valuable (which is why people hoard it because they know others find value in it), but in the case of a paper dollar, its value has to be enforced.
Of course, there are soooo many goods and services that can be purchased with a dollar we don't generally think of it like this. Many users of the dollar don't even think about the kinds of conversations we're having here. They simply take it for granted that dollars have value. How do they know? because then they go in Walmart there is $20 million dollars worth of crap they can trade their dollars for.
At the end of the day, the dollars are fiat because of the creator of those dollars, the US government no longer promises to trade those dollars for anything (other than perhaps to make change) or top satisfy your payments in the taxes it imposes on you.
I think the value of the dollar is derived extrinsically. Its value comes from what can be obtained with it, not in the thing itself (though too many people treat the dollar as intrinsically valuable).
For example, what is the value of a key? Let's say the key is actually a plastic card. If you had 1 ton of those cards it would cost you money to dispose of them. But what if that card was the key to a lock and you needed it to get out of a room. A room you could never escape from without that card?
The value of that key, at least for you, would be equal to how much you value your life.
So what about the dollar? (here is how dollar fiat differs from gold fiat)
The US government imposes taxes. If the dollar didn't buy anything, what would the value of the dollar be then?
If the government could still enforce a tax and the penalty for non-payment was a loss of dollars, a loss of property or a loss of freedom, you would value the dollar equal to your desire to avoid punishment (implicit in that statemnt is a belief that you could not stop the government from carrying out it's punishment).
Thus if the government made jobs available so that you could earn dollars to pay your tax, you would work for those dollars relative to your desire to avoid punishment. Now you might decide not to earn the dollars and fight the government, but that just means that you no longer see the governments threat of force as capable of enforcing the value of the dollar.
Make sense?
You're preaching still more Lizardtarian dogma when you claim that people make an independent judgment that gold has more value than government-fiat currency. The private-sector oligarchy creates that delusion. The thought-control artists rely on the psychology that people don't want to admit that they are suckers.
The tamed masses are even manipulated into looking down on those who admit they've been deceived. For example, Mitt Romney's Daddy lost his own chance at the Presidency when he said he had been brainwashed about Vietnam.
With respect, what does this have to do with my response?
The banks circulate the savings, changing potential productivity into actual activity. Also, the saver himself does that, because he is working more than he absolutely needs to.You constantly take the part for the whole. The account, as a lump sum, is rarely on demand. The bank can make profitable use of most of it for a significant amount of time. The bank is in effect a co-depositor.Does that mean the bank is more likely to give a motgage to someone whose homebuilder or original owner also has an account at that bank?
Not at all, though, if the borrower and the seller have accounts at the same bank, that's definitely good for the bank, but given the on-demand nature of bank accounts, the bank has little incentive to favor this arrangement.
It really depends on what you're talking about.
Again, the point that most Austrians seem to be making is that savings are "good" for the economy as it increases the supply of lendable funds.
I'd maintain it's bad for the economy as savings does not increase the lendability of funds, regardless of whether or not individual banks can lend reserves. Savings slows the overall economy as the amount of money circulating decreases. Savings is a "demand leakagle".
The level of reserves in the system as a whole regardless of savings levels say virtually the same.
That is the argument, thus any talk of what individual banks can do is just arguing to be right and avoiding the entire point of this debate.
I say this with no false-politeness respect for you because you are too shallow and negligent to deserve any. It is dishonest to refuse a challenge to the existence of your ideology's "self-determining" market because you can't handle it and claim it's because it's off topic. Lame. But it's your own fault you let yourself get crippled by plutocratic parasites."Free Market" Means That Those Who Control a Market Are Free to Do Whatever They WantWhat are you after? What Greedhead oinkonomics do you want us to submit ourselves to? You seem to be condemning the banks' accounting practices and leading up to suggesting some self-serving alternative.
I'm not "after" anything. I enjoy conversations on the topic. If I'm "after" anything it's sharing what I know and learning what other people believe. If someone disagrees then I hope for a good debate where, either I learn something or I share what I know.
For one thing, "fiat" is a dishonest word sneaked into econobabble so that some snake-oil speculator can scare suckers into paying ever higher prices for his urine-colored rocks. Gold itself is a fiat currency, but scam artists know how to monopolize a term in order to give it the meaning most profitable to themseves.
While I agree with you that gold is really, when you stop and think about it, a "fiat" currency. What makes gold unique is the number of people that agree it has value across almost every country on earth (if not all of them). No one has to enforce golds value, people just accept it.
Now the term fiat simply means that its value is determined by proclamation. In the case of gold, people proclaim to themselves that gold is valuable (which is why people hoard it because they know others find value in it), but in the case of a paper dollar, its value has to be enforced.
Of course, there are soooo many goods and services that can be purchased with a dollar we don't generally think of it like this. Many users of the dollar don't even think about the kinds of conversations we're having here. They simply take it for granted that dollars have value. How do they know? because then they go in Walmart there is $20 million dollars worth of crap they can trade their dollars for.
At the end of the day, the dollars are fiat because of the creator of those dollars, the US government no longer promises to trade those dollars for anything (other than perhaps to make change) or top satisfy your payments in the taxes it imposes on you.
I think the value of the dollar is derived extrinsically. Its value comes from what can be obtained with it, not in the thing itself (though too many people treat the dollar as intrinsically valuable).
For example, what is the value of a key? Let's say the key is actually a plastic card. If you had 1 ton of those cards it would cost you money to dispose of them. But what if that card was the key to a lock and you needed it to get out of a room. A room you could never escape from without that card?
The value of that key, at least for you, would be equal to how much you value your life.
So what about the dollar? (here is how dollar fiat differs from gold fiat)
The US government imposes taxes. If the dollar didn't buy anything, what would the value of the dollar be then?
If the government could still enforce a tax and the penalty for non-payment was a loss of dollars, a loss of property or a loss of freedom, you would value the dollar equal to your desire to avoid punishment (implicit in that statemnt is a belief that you could not stop the government from carrying out it's punishment).
Thus if the government made jobs available so that you could earn dollars to pay your tax, you would work for those dollars relative to your desire to avoid punishment. Now you might decide not to earn the dollars and fight the government, but that just means that you no longer see the governments threat of force as capable of enforcing the value of the dollar.
Make sense?
You're preaching still more Lizardtarian dogma when you claim that people make an independent judgment that gold has more value than government-fiat currency. The private-sector oligarchy creates that delusion. The thought-control artists rely on the psychology that people don't want to admit that they are suckers.
The tamed masses are even manipulated into looking down on those who admit they've been deceived. For example, Mitt Romney's Daddy lost his own chance at the Presidency when he said he had been brainwashed about Vietnam.
With respect, what does this have to do with my response?
You constantly take the part for the whole. The account, as a lump sum, is rarely on demand. The bank can make profitable use of most of it for a significant amount of time. The bank is in effect a co-depositor.Does that mean the bank is more likely to give a motgage to someone whose homebuilder or original owner also has an account at that bank?
Not at all, though, if the borrower and the seller have accounts at the same bank, that's definitely good for the bank, but given the on-demand nature of bank accounts, the bank has little incentive to favor this arrangement.
It really depends on what you're talking about.
Again, the point that most Austrians seem to be making is that savings are "good" for the economy as it increases the supply of lendable funds.
I'd maintain it's bad for the economy as savings does not increase the lendability of funds, regardless of whether or not individual banks can lend reserves. Savings slows the overall economy as the amount of money circulating decreases. Savings is a "demand leakagle".
The level of reserves in the system as a whole regardless of savings levels say virtually the same.
That is the argument, thus any talk of what individual banks can do is just arguing to be right and avoiding the entire point of this debate.
The banks circulate the savings, changing potential productivity into actual activity. Also, the saver himself does that, because he is working more than he absolutely needs to.You constantly take the part for the whole. The account, as a lump sum, is rarely on demand. The bank can make profitable use of most of it for a significant amount of time. The bank is in effect a co-depositor.Does that mean the bank is more likely to give a motgage to someone whose homebuilder or original owner also has an account at that bank?
Not at all, though, if the borrower and the seller have accounts at the same bank, that's definitely good for the bank, but given the on-demand nature of bank accounts, the bank has little incentive to favor this arrangement.
It really depends on what you're talking about.
Again, the point that most Austrians seem to be making is that savings are "good" for the economy as it increases the supply of lendable funds.
I'd maintain it's bad for the economy as savings does not increase the lendability of funds, regardless of whether or not individual banks can lend reserves. Savings slows the overall economy as the amount of money circulating decreases. Savings is a "demand leakagle".
The level of reserves in the system as a whole regardless of savings levels say virtually the same.
That is the argument, thus any talk of what individual banks can do is just arguing to be right and avoiding the entire point of this debate.
