ShackledNation
Libertarian
No it isn't. I already explained how. All the bank has to do is issue the loans, and those loans create the deposits.So no law was broken. Got it.I am talking about my scenario, whereby a bank creates loans up to $900 from a single deposit of $100 cash. What law is broken?
The law of mathematics.
Yes. And as I mentioned before, that is totally irrelevant. Try to keep up.
Yes. Clearly so, actually. A bank can create loans of up to $900 from a single $100 cash deposit with a reserve requirement set at %10.
That describes money creation as you think it happens.
They don't have to pay interest on them.
Ad hominem.Right, because they're idiots. The cartoons were cute.
The reality remains that an initial cash deposit of $100 allows a bank to make $900 in loans. If the bank does so, they will have met the 10% reserve requirement. You are flailing here--you are even starting to disagree with yourself.
So no law was broken. Got it.
It is impossible for a bank with a single deposit of $100 to loan $900. Law has nothing to do with it.
Why can they only lend $90? Doing so would put their reserve ratio at above 50%. They can lend until it is at 10%.Clearly so, actually. A bank can create loans of up to $900 from a single $100 cash deposit with a reserve requirement set at %10.
As long as they get additional deposits of $900 or borrow $900 from another bank.
Barring additional deposits or borrowings, they can only lend $90.
Banks do not have to pay you interest for having money in a debit or checking account. If they do decide to do so, the amount is so minuscule that it is completely irrelevant to this discussion.That describes money creation as you think it happens.
Why are you giving links that prove I'm right then?
Why do they ignore the additional deposits they must pay interest on?
They don't have to pay interest on them.
Why don't they have to pay interest on the additional deposits?