How is money created?

[Contumacious]

Jesus. Loans create deposits. Your entire argument isn't even attacking that.

Honestly, I have an okay (not great, but I'm not totally ignorant either) understanding of money creation and I'm having a hard time following you two.

My understanding is that a bank receives a deposit from a client. The bank then generally keeps a certain % of that deposit stored (based off of laws or the bank's policies) and then seeks to loan out or invest the rest. As an example, let's say Todd deposits $100 in Bank [US]. Bank [US] has a policy of keeping 20% of deposits and looking to loan the rest. Kiin goes to Bank [US] wanting a loan. Bank [US] loans Kiin $80. In this scenario Bank [US] has just created $80 for the economy.

Banks create deposits when they loan.
A good read:
The truth is out: money is just an IOU, and the banks are rolling in it | David Graeber
Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans.

Many authorities have said it: banks do not lend their deposits. They create the money they lend on their books.

Robert B. Anderson, Treasury Secretary under Eisenhower, said it in 1959:

When a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposits; it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.

The Bank of England said it in the spring of 2014, writing in its quarterly bulletin:

The reality of how money is created today differs from the description found in some economics textbooks: Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.

. . . Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

All of which leaves us to wonder: If banks do not lend their depositors’ money, why are they always scrambling to get it? Banks advertise to attract depositors, and they pay interest on the funds. What good are our deposits to the bank?

The answer is that while banks do not need the deposits to create loans, they do need to balance their books; and attracting customer deposits is usually the cheapest way to do it.

Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans.

Ellen Brown is a moron. Your use of her as a source is perfect.

When a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposits; it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.


Yes. And when the borrower tries to use that money, whether by withdrawing currency at the lending bank or writing a check against their new deposit account, the bank better have access to deposits, if it doesn't want the check to bounce.

A simple, hypothetical example will illustrate the principal of insanity that is the basis of our current monetary system.

Suppose JPMorgan holds $1 billion in total deposits. In the original form of our fractional-reserve fraud, the fraud ratio was set at 10:1. This meant that for every dollar that a bank actually held, it was allowed to “lend” $10. Now for the simple arithmetic.

JPMorgan is holding $1 billion of other peoples’ property, but it is allowed to “lend” a total of $10 billion. Where does the other $9 billion come from? It is conjured out of thin air via fractional-reserve fraud. Thus, for many readers, this represents their first actual glimpse of the full scope of fraudulence of our current monetary system.

JPMorgan is holding $1 billion of other peoples’ property, but it is allowed to “lend” a total of $10 billion. Where does the other $9 billion come from?

You are mistaken. With only $1 billion in deposits, JPMorgan can loan out a maximum of $1 billion.
Every loan is fully funded. With a 10% reserve requirement, $10 billion in total deposits (or deposits plus other borrowings) could support $9 billion in loans.

Again , it is conjured out of thin air via fractional-reserve fraud.

WE THE PEOPLE of course must actually pay the "debt". without using fractional reserve

 

[Toddsterpatriot]

Todd, does a bank take from its deposits to loan?

Where else would the money come from to clear the check?

Jesus. Loans create deposits. Your entire argument isn't even attacking that.

Honestly, I have an okay (not great, but I'm not totally ignorant either) understanding of money creation and I'm having a hard time following you two.

My understanding is that a bank receives a deposit from a client. The bank then generally keeps a certain % of that deposit stored (based off of laws or the bank's policies) and then seeks to loan out or invest the rest. As an example, let's say Todd deposits $100 in Bank [US]. Bank [US] has a policy of keeping 20% of deposits and looking to loan the rest. Kiin goes to Bank [US] wanting a loan. Bank [US] loans Kiin $80. In this scenario Bank [US] has just created $80 for the economy.

Banks create 100% of the loan, not 90%. For a $1000 loan, the bank creates a $1000 deposit (their liability) and a $1000+ promissory note (their asset). The 10% that you think is set aside is actually just their reserve requirement increasing by $100. And reserve transactions happen within the walls of the Fed - banks never touch those reserves.

Here's where deposits come in: to your bank, they are a cheap source of reserves, nothing more. When you deposit a check (drawn on a different bank) for $150, your bank marks up your account by $150 (a liability to your bank), and the Fed transfers $150 from the other bank's reserve account to your bank's reserve account. Assets = liabilities, and the bank's position doesn't change. But now, because of the deposit, your bank has $135 in excess reserves, and they probably aren't paying you any interest, either.

Without your deposit, the bank could still make the loan; their reserve account doesn't have to be brought up until days later.

And reserve transactions happen within the walls of the Fed - banks never touch those reserves.

Banks touch reserves all the time.

Not the ones in Fed accounts. Banks can exchange reserves for vault cash and vice versa, that's it.

Yes. They could turn their reserves entirely into vault cash.
Clearing checks and sending wires are the other ways they "touch their reserves".

 

[Centinel]

Bank loans don't increase the supply of gold, and they don't increase the supply of FRNs.

They simply increase the number of claims on the same amount of FRNs.

Bank loans don't increase the supply of gold, and they don't increase the supply of FRNs.

And yet, they still manage to increase the money supply.

No they don't. The number of FRNs remains the same. Just as, when gold was money, total amount of gold remained the same.

No they don't. The number of FRNs remains the same.

They do increase the money supply. I never said the number of FRNs changed.
You realize the money supply is much more than the number of FRNs, don't you?

You mean like it was more the total amount of gold when gold was money?

Of course the money supply was more than just the gold supply.
What are the parts of money supply? Do you know?

There is a difference between money and a claim to money. M1 and up are claims to money.

There is a difference between an ounce of gold and a claim to an ounce of gold. You obviously are well versed in the concept of fractional reserve banking, so you know that it creates multiple claims to the same gold coin.

Bank loans create more claims to money, they don't create more actual money.

 

[Toddsterpatriot]

Honestly, I have an okay (not great, but I'm not totally ignorant either) understanding of money creation and I'm having a hard time following you two.

My understanding is that a bank receives a deposit from a client. The bank then generally keeps a certain % of that deposit stored (based off of laws or the bank's policies) and then seeks to loan out or invest the rest. As an example, let's say Todd deposits $100 in Bank [US]. Bank [US] has a policy of keeping 20% of deposits and looking to loan the rest. Kiin goes to Bank [US] wanting a loan. Bank [US] loans Kiin $80. In this scenario Bank [US] has just created $80 for the economy.

Banks create deposits when they loan.
A good read:
The truth is out: money is just an IOU, and the banks are rolling in it | David Graeber
Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans.

Many authorities have said it: banks do not lend their deposits. They create the money they lend on their books.

Robert B. Anderson, Treasury Secretary under Eisenhower, said it in 1959:

When a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposits; it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.

The Bank of England said it in the spring of 2014, writing in its quarterly bulletin:

The reality of how money is created today differs from the description found in some economics textbooks: Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.

. . . Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

All of which leaves us to wonder: If banks do not lend their depositors’ money, why are they always scrambling to get it? Banks advertise to attract depositors, and they pay interest on the funds. What good are our deposits to the bank?

The answer is that while banks do not need the deposits to create loans, they do need to balance their books; and attracting customer deposits is usually the cheapest way to do it.

Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans.

Ellen Brown is a moron. Your use of her as a source is perfect.

When a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposits; it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.


Yes. And when the borrower tries to use that money, whether by withdrawing currency at the lending bank or writing a check against their new deposit account, the bank better have access to deposits, if it doesn't want the check to bounce.

A simple, hypothetical example will illustrate the principal of insanity that is the basis of our current monetary system.

Suppose JPMorgan holds $1 billion in total deposits. In the original form of our fractional-reserve fraud, the fraud ratio was set at 10:1. This meant that for every dollar that a bank actually held, it was allowed to “lend” $10. Now for the simple arithmetic.

JPMorgan is holding $1 billion of other peoples’ property, but it is allowed to “lend” a total of $10 billion. Where does the other $9 billion come from? It is conjured out of thin air via fractional-reserve fraud. Thus, for many readers, this represents their first actual glimpse of the full scope of fraudulence of our current monetary system.

JPMorgan is holding $1 billion of other peoples’ property, but it is allowed to “lend” a total of $10 billion. Where does the other $9 billion come from?

You are mistaken. With only $1 billion in deposits, JPMorgan can loan out a maximum of $1 billion.
Every loan is fully funded. With a 10% reserve requirement, $10 billion in total deposits (or deposits plus other borrowings) could support $9 billion in loans.

Again , it is conjured out of thin air via fractional-reserve fraud.

WE THE PEOPLE of course must actually pay the "debt". without using fractional reserve

Again , it is conjured out of thin air via fractional-reserve fraud.

If banks could conjure money out of thin air, no bank would ever fail.

WE THE PEOPLE of course must actually pay the "debt". without using fractional reserve

We have to pay this JPMorgan debt? Why do you feel that?

 

[Dovahkiin]

Banks create deposits when they loan.
A good read:
The truth is out: money is just an IOU, and the banks are rolling in it | David Graeber
Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans.

Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans.

Ellen Brown is a moron. Your use of her as a source is perfect.

When a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposits; it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.


Yes. And when the borrower tries to use that money, whether by withdrawing currency at the lending bank or writing a check against their new deposit account, the bank better have access to deposits, if it doesn't want the check to bounce.

A simple, hypothetical example will illustrate the principal of insanity that is the basis of our current monetary system.

Suppose JPMorgan holds $1 billion in total deposits. In the original form of our fractional-reserve fraud, the fraud ratio was set at 10:1. This meant that for every dollar that a bank actually held, it was allowed to “lend” $10. Now for the simple arithmetic.

JPMorgan is holding $1 billion of other peoples’ property, but it is allowed to “lend” a total of $10 billion. Where does the other $9 billion come from? It is conjured out of thin air via fractional-reserve fraud. Thus, for many readers, this represents their first actual glimpse of the full scope of fraudulence of our current monetary system.

JPMorgan is holding $1 billion of other peoples’ property, but it is allowed to “lend” a total of $10 billion. Where does the other $9 billion come from?

You are mistaken. With only $1 billion in deposits, JPMorgan can loan out a maximum of $1 billion.
Every loan is fully funded. With a 10% reserve requirement, $10 billion in total deposits (or deposits plus other borrowings) could support $9 billion in loans.

Again , it is conjured out of thin air via fractional-reserve fraud.

WE THE PEOPLE of course must actually pay the "debt". without using fractional reserve

Again , it is conjured out of thin air via fractional-reserve fraud.

If banks could conjure money out of thin air, no bank would ever fail.

WE THE PEOPLE of course must actually pay the "debt". without using fractional reserve

We have to pay this JPMorgan debt? Why do you feel that?

Banks create money when they loan. This is "out of thin air." Now, when the loan is paid back..

 

[Toddsterpatriot]

Bank loans don't increase the supply of gold, and they don't increase the supply of FRNs.

And yet, they still manage to increase the money supply.

No they don't. The number of FRNs remains the same. Just as, when gold was money, total amount of gold remained the same.

No they don't. The number of FRNs remains the same.

They do increase the money supply. I never said the number of FRNs changed.
You realize the money supply is much more than the number of FRNs, don't you?

You mean like it was more the total amount of gold when gold was money?

Of course the money supply was more than just the gold supply.
What are the parts of money supply? Do you know?

There is a difference between money and a claim to money. M1 and up are claims to money.

There is a difference between an ounce of gold and a claim to an ounce of gold. You obviously are well versed in the concept of fractional reserve banking, so you know that it creates multiple claims to the same gold coin.

M1 and up are claims to money.

Is it considered money? Is it counted in the money supply?

There is a difference between an ounce of gold and a claim to an ounce of gold.

Yes, a bank account is different than a gold coin.

 

[JohnfrmCleveland]

Jesus. Loans create deposits. Your entire argument isn't even attacking that.

You didn't explain how the check clears.

If their isn't enough money in Billy's deposit, which Billy does indeed draw from, of course the check isn't going to clear. Now, how did billy's deposit get their in the first place?

If their isn't enough money in Billy's deposit, which Billy does indeed draw from, of course the check isn't going to clear.

You said Billy borrowed $10,000. So they created a deposit account for Billy of $10,000.
How can there not be enough money in Billy's deposit for him to withdraw $10,000?

Yes, they did indeed create a deposit account for $10000.
In your scenario, when the check doesn't clear, their obviously isn't enough in his deposit. Notice how we're not even arguing that LOANS CREATE THE DEPOSITS.

In your scenario, when the check doesn't clear, their obviously isn't enough in his deposit.

You're contradicting your previous claims.
Billy took out a loan of $10,000. The bank creates a deposit account for Billy of $10,000.
Billy writes a check for $10,000. The check recipient deposits it in another bank. The check bounces.
Why?

Notice how we're not even arguing that LOANS CREATE THE DEPOSITS.

Notice you aren't explaining why Billy's loan requires additional deposits to clear.

The only thing the bank needs to clear the check is $10,000 in reserves, which the Fed will transfer to the depositing bank's reserve account. Attracting other deposits is the easiest way to get those reserves, but not the only way.

 

[Rustic]

This country alone has most likely 225+ trillion in debt, Assets a fraction of that... Lol

If I lent you $1000, how would that change our combined assets and liabilities?

The worlds answer to assets and liabilities - is robbing Peter to pay Paul, all money is an IOU… LOL

I didn't rob the bank when I took out a mortgage.

You also don't own that property until the last cent paid, and banks only deal in IOUs... Lol

You also don't own that property until the last cent paid

Wow, that's interesting. Still doesn't change the fact that debt is not owed to a hole in the sky.
Debt is never higher than assets.

Lol

 

[Rustic]

IOUs are the only backing of any financial transaction...

 

[Centinel]

No they don't. The number of FRNs remains the same. Just as, when gold was money, total amount of gold remained the same.

No they don't. The number of FRNs remains the same.

They do increase the money supply. I never said the number of FRNs changed.
You realize the money supply is much more than the number of FRNs, don't you?

You mean like it was more the total amount of gold when gold was money?

Of course the money supply was more than just the gold supply.
What are the parts of money supply? Do you know?

There is a difference between money and a claim to money. M1 and up are claims to money.

There is a difference between an ounce of gold and a claim to an ounce of gold. You obviously are well versed in the concept of fractional reserve banking, so you know that it creates multiple claims to the same gold coin.

M1 and up are claims to money.

Is it considered money? Is it counted in the money supply?

There is a difference between an ounce of gold and a claim to an ounce of gold.

Yes, a bank account is different than a gold coin.

Is it considered money? Is it counted in the money supply?

Yes, many people consider a bank account to actually be money, instead of recognizing that it is merely a claim on money.

Yes, a bank account is different than a gold coin.

Precisely. The gold coin is money, and a bank account is something different.

 

[Toddsterpatriot]

If their isn't enough money in Billy's deposit, which Billy does indeed draw from, of course the check isn't going to clear.

You said Billy borrowed $10,000. So they created a deposit account for Billy of $10,000.
How can there not be enough money in Billy's deposit for him to withdraw $10,000?

Yes, they did indeed create a deposit account for $10000.
In your scenario, when the check doesn't clear, their obviously isn't enough in his deposit. Notice how we're not even arguing that LOANS CREATE THE DEPOSITS.

In your scenario, when the check doesn't clear, their obviously isn't enough in his deposit.

You're contradicting your previous claims.
Billy took out a loan of $10,000. The bank creates a deposit account for Billy of $10,000.
Billy writes a check for $10,000. The check recipient deposits it in another bank. The check bounces.
Why?

Notice how we're not even arguing that LOANS CREATE THE DEPOSITS.

Notice you aren't explaining why Billy's loan requires additional deposits to clear.

The only thing the bank needs to clear the check is $10,000 in reserves, which the Fed will transfer to the depositing bank's reserve account. Attracting other deposits is the easiest way to get those reserves, but not the only way.

The only thing the bank needs to clear the check is $10,000 in reserves,

Yes, that's what Dovahkiin is missing.

 

[Rustic]

No they don't. The number of FRNs remains the same.

They do increase the money supply. I never said the number of FRNs changed.
You realize the money supply is much more than the number of FRNs, don't you?

You mean like it was more the total amount of gold when gold was money?

Of course the money supply was more than just the gold supply.
What are the parts of money supply? Do you know?

There is a difference between money and a claim to money. M1 and up are claims to money.

There is a difference between an ounce of gold and a claim to an ounce of gold. You obviously are well versed in the concept of fractional reserve banking, so you know that it creates multiple claims to the same gold coin.

M1 and up are claims to money.

Is it considered money? Is it counted in the money supply?

There is a difference between an ounce of gold and a claim to an ounce of gold.

Yes, a bank account is different than a gold coin.

Is it considered money? Is it counted in the money supply?

Yes, many people consider a bank account to actually be money, instead of recognizing that it is merely a claim on money.

Yes, a bank account is different than a gold coin.

Precisely. The gold coin is money, and a bank account is something different.

Printed Paper is an IOU... A bank is a storage for IOUs...

 

[Centinel]

You mean like it was more the total amount of gold when gold was money?

Of course the money supply was more than just the gold supply.
What are the parts of money supply? Do you know?

There is a difference between money and a claim to money. M1 and up are claims to money.

There is a difference between an ounce of gold and a claim to an ounce of gold. You obviously are well versed in the concept of fractional reserve banking, so you know that it creates multiple claims to the same gold coin.

M1 and up are claims to money.

Is it considered money? Is it counted in the money supply?

There is a difference between an ounce of gold and a claim to an ounce of gold.

Yes, a bank account is different than a gold coin.

Is it considered money? Is it counted in the money supply?

Yes, many people consider a bank account to actually be money, instead of recognizing that it is merely a claim on money.

Yes, a bank account is different than a gold coin.

Precisely. The gold coin is money, and a bank account is something different.

Printed Paper is an IOU... A bank is a storage for IOUs...

Actually a federal reserve not isn't an IOU. A FRN is the end of the line. It is analogous to a gold coin. It's simply a thing that people place value on. If you own a $20 FRN, nobody owes you anything.

 

[Contumacious]

Of course the money supply was more than just the gold supply.
What are the parts of money supply? Do you know?

There is a difference between money and a claim to money. M1 and up are claims to money.

There is a difference between an ounce of gold and a claim to an ounce of gold. You obviously are well versed in the concept of fractional reserve banking, so you know that it creates multiple claims to the same gold coin.

M1 and up are claims to money.

Is it considered money? Is it counted in the money supply?

There is a difference between an ounce of gold and a claim to an ounce of gold.

Yes, a bank account is different than a gold coin.

Is it considered money? Is it counted in the money supply?

Yes, many people consider a bank account to actually be money, instead of recognizing that it is merely a claim on money.

Yes, a bank account is different than a gold coin.

Precisely. The gold coin is money, and a bank account is something different.

Printed Paper is an IOU... A bank is a storage for IOUs...

Actually a federal reserve not isn't an IOU. A FRN is the end of the line. It is analogous to a gold coin. It's simply a thing that people place value on. If you own a $20 FRN, nobody owes you anything.

Analogous to a gold coin?

HUH?

Another victim of the US "education"system !!!!!!!!!!!!!


Un-fucking-believable.


.

 

[Rustic]

Of course the money supply was more than just the gold supply.
What are the parts of money supply? Do you know?

There is a difference between money and a claim to money. M1 and up are claims to money.

There is a difference between an ounce of gold and a claim to an ounce of gold. You obviously are well versed in the concept of fractional reserve banking, so you know that it creates multiple claims to the same gold coin.

M1 and up are claims to money.

Is it considered money? Is it counted in the money supply?

There is a difference between an ounce of gold and a claim to an ounce of gold.

Yes, a bank account is different than a gold coin.

Is it considered money? Is it counted in the money supply?

Yes, many people consider a bank account to actually be money, instead of recognizing that it is merely a claim on money.

Yes, a bank account is different than a gold coin.

Precisely. The gold coin is money, and a bank account is something different.

Printed Paper is an IOU... A bank is a storage for IOUs...

Actually a federal reserve not isn't an IOU. A FRN is the end of the line. It is analogous to a gold coin. It's simply a thing that people place value on. If you own a $20 FRN, nobody owes you anything.

 

[Toddsterpatriot]

No they don't. The number of FRNs remains the same.

They do increase the money supply. I never said the number of FRNs changed.
You realize the money supply is much more than the number of FRNs, don't you?

You mean like it was more the total amount of gold when gold was money?

Of course the money supply was more than just the gold supply.
What are the parts of money supply? Do you know?

There is a difference between money and a claim to money. M1 and up are claims to money.

There is a difference between an ounce of gold and a claim to an ounce of gold. You obviously are well versed in the concept of fractional reserve banking, so you know that it creates multiple claims to the same gold coin.

M1 and up are claims to money.

Is it considered money? Is it counted in the money supply?

There is a difference between an ounce of gold and a claim to an ounce of gold.

Yes, a bank account is different than a gold coin.

Is it considered money? Is it counted in the money supply?

Yes, many people consider a bank account to actually be money, instead of recognizing that it is merely a claim on money.

Yes, a bank account is different than a gold coin.

Precisely. The gold coin is money, and a bank account is something different.

Yes, many people consider a bank account to actually be money,

Not just people. The Fed also considers it money.

Precisely. The gold coin is money, and a bank account is something different.

And they are both part of the money supply.

 

[Toddsterpatriot]

There is a difference between money and a claim to money. M1 and up are claims to money.

There is a difference between an ounce of gold and a claim to an ounce of gold. You obviously are well versed in the concept of fractional reserve banking, so you know that it creates multiple claims to the same gold coin.

M1 and up are claims to money.

Is it considered money? Is it counted in the money supply?

There is a difference between an ounce of gold and a claim to an ounce of gold.

Yes, a bank account is different than a gold coin.

Is it considered money? Is it counted in the money supply?

Yes, many people consider a bank account to actually be money, instead of recognizing that it is merely a claim on money.

Yes, a bank account is different than a gold coin.

Precisely. The gold coin is money, and a bank account is something different.

Printed Paper is an IOU... A bank is a storage for IOUs...

Actually a federal reserve not isn't an IOU. A FRN is the end of the line. It is analogous to a gold coin. It's simply a thing that people place value on. If you own a $20 FRN, nobody owes you anything.

That's a funny video. Thanks for posting it.

 

[Rustic]

M1 and up are claims to money.

Is it considered money? Is it counted in the money supply?

There is a difference between an ounce of gold and a claim to an ounce of gold.

Yes, a bank account is different than a gold coin.

Is it considered money? Is it counted in the money supply?

Yes, many people consider a bank account to actually be money, instead of recognizing that it is merely a claim on money.

Yes, a bank account is different than a gold coin.

Precisely. The gold coin is money, and a bank account is something different.

Printed Paper is an IOU... A bank is a storage for IOUs...

Actually a federal reserve not isn't an IOU. A FRN is the end of the line. It is analogous to a gold coin. It's simply a thing that people place value on. If you own a $20 FRN, nobody owes you anything.

That's a funny video. Thanks for posting it.

What's funny is our financial system in this country, a fucking joke. That's what happens when you're in debt more than you can ever pay.

 

[Toddsterpatriot]

Is it considered money? Is it counted in the money supply?

Yes, many people consider a bank account to actually be money, instead of recognizing that it is merely a claim on money.

Yes, a bank account is different than a gold coin.

Precisely. The gold coin is money, and a bank account is something different.

Printed Paper is an IOU... A bank is a storage for IOUs...

Actually a federal reserve not isn't an IOU. A FRN is the end of the line. It is analogous to a gold coin. It's simply a thing that people place value on. If you own a $20 FRN, nobody owes you anything.

That's a funny video. Thanks for posting it.

What's funny is our financial system in this country, a fucking joke. That's what happens when you're in debt more than you can ever pay.

Why can't we ever pay?

 

[Rustic]

Printed Paper is an IOU... A bank is a storage for IOUs...

Actually a federal reserve not isn't an IOU. A FRN is the end of the line. It is analogous to a gold coin. It's simply a thing that people place value on. If you own a $20 FRN, nobody owes you anything.

That's a funny video. Thanks for posting it.

What's funny is our financial system in this country, a fucking joke. That's what happens when you're in debt more than you can ever pay.

Why can't we ever pay?

Far too large to be ever be paid back... Lol