The Creation of the Federal Reserve System (Part 4)

I have shown you graphs of excess reserves, reserves held at the Federal Reserve, and reserves held in the form of cash at bank vaults.

Please apologize immediately!!

Reserves are either excess or required. If there is no excess reserves that means all reserves are required. Simple stuff bro. Apology is accepted in advance.

 

Sure, but if they're excess reserves and then become loans, then they're neither anymore, now aren't they?

 

False. Loans create deposits. As you make loans under the fractional reserve standard excess reserves simply become required reserves when you make loans. For example with a 10% reserve requirement

Someone deposits $1000 in your bank.

A | L
Req Reserves $100 | Deposit $1000
Exc Reserves $900

Now you make a $1000 loan.

A | L
Req Reserves $200 | Deposit $2000
Exc Reserves $800
Loan $1000

Notice how there is still $1000 in reserves in the system. And you might try to get all Iriemon on me and say that the bank needs reserves to make the loan because the borrower gives the check to someone else who deposits it in another bank. But as the banking system as a whole... this is the process that exists. Reserves do not leave the system, they simply go from excess to required and vice versa.

Therefore, what I have shown you is that there were $43 billion in total reserves in the system with $6.25 trillion in loans. If banks NEED reserves to make loans and they need to meet a 10% required reserve ratio... how can they make so many loans with less than 1% reserves?

The paper from the Fed even says there is NO LINK between reserves and loans.

 

Sure, that's because the banks have acquired excess reserves from an alternate source aside from deposits, and then loan it out. Not all of it comes back into a bank as deposits and remains as cash circulating outside of bank vaults.

 

What?? Lol, now you are just making stuff up. You can not acquire excess reserves from an alternate source. Reserves never leave the system. It's either required reserves or excess reserves.

And can you please stop just making stuff up and start providing sources that prove banks need reserves to make loans. Just saying MMM Step 6 isn't going to work any more. We have moved up to the big leagues bro and you are batting .000.

 

Why not?

Fabrication. So the Fed doesn't have the power to manipulate MB?

This claim does not disprove anything I said.

Prove that banks don't need reserves to make loans.

Pure fluff; utter nonsense; not even worth responding to.

 

You are the one that claimed banks need reserves to make loans. So please provide me a source that shows how the banks can make $6.25 trillion in loans with only $43 billion in reserves.

Please do not give me your subjective opinion, since we all know by now, it's really not worth listening too. Give me an actual reputable source that explains how a bank can make $6.25 trillion in loans with only $43 billion in reserves if a bank needs reserves to make loans.

Thanks!

 

Who said that banks only had $43 billion in reserves?

I haven't given you any subjective opinons. You're setting up strawmans again.

Who said that banks only had $43 billion in reserves?

I've asked you plenty of times to prove that banks don't need reserves to make loans and you have failed. If banks don't need reserves to make loans, then I suppose you believe they can just create money out of thin air to make their loans?

 

Now you are just being a troll. I have shown you direct facts stating there was $43 billion in reserves and I even showed you graphs of reserves and excess reserves to prove the point even further.

If you won't even accept facts than this argument is useless. I will take your extreme stubbornness as an admittance of defeat.

Thanks for playing, the bill for your education will be in the mail soon! Thanks

 

The pot calling the kettle black.

None of your sources said that there were $43 billion worth of "reserves". You're just making stuff up.

I will take the fact that your own sources contradict the figures you're using and then running away as an admittance of defeat.

 

I see you have chosen to take the childish way out. That's what I expected. What a fraud you are!! Get owned!

 

You could have done the mature thing and showed me where in any of your sources says that there were "$43 billion worth of reserves" in 2007 but instead you resorted to your expected typical childish MO of insult hurling.

 

Post #47 and #49. Please apologize for lying! Thanks!

If you are going to blatantly ignore facts than there is no use talking to you. Lol! Get owned scrub.

 

@ Dr. Righteous,

Before I go back and read it, did you write the opening piece in Part I?

 

Those posts show required reserves of $43 billion.

Reserves = Required Reserves + Excess Reserves.

The only way your statement could possibly be true is if there were $0 worth of excess reserves in 2007. Which we know is not true based off your own source of the graph in Post 49.

There was not "$43 billion worth of reserves" in 2007. Proven wrong by your own data.

 

Nope, it was written by forum member thatkimjongilisanucklehed

 

You are so uneducated it's embarrassing...



Please apologize immediately for embarrassing this forum! Thanks!

 

Reposting the same graph of Excess Reserves, calling me an embarassment, and demanding an apology does not change the fact that you were completely wrong about your claim of there being $43 billion "reserves" in 2007. It's clear that you're trolling at this point, because an honorable person would have admitted that he was in error. You are clearly not an honorable person.

 

Thanks....

 

Fine there was $43 billion in required reserves and $1.5 billion in excess reserves creating a total amount of reserves of $44.5 billion.

LOL!!! Please apologize, I know you know you are wrong and that you just won't admit it.

 

Depends on what part of 2007 you're referring to.

Wrong about what? I already proved to you that your claim that there was only $43 billion in reserves in 2007 was completely wrong. If anything, you owe me an apology for calling me a liar.

 

Hahahaha, so you are going with the $1.5-$3 billion extra in excess reserves to prove your point? Alright child!

 

What point are you talking about? The point is that your claim was wrong and you're refusing to apologize.

 

There is a great disturbance in the facts in this thread. Part of the problem is it reads like an argument everyone else jumped in the middle of. Also no one seems to be able to explain the FED in simple terms, much less what's wrong with it. Too many times when asked point blank for someone who shouts "END THE FED" to explain what they mean, they can't.

This looks like an impartial place to start:

http://money.howstuffworks.com/fed.htm

Unless someone else disagrees and would like to say why?

And may God help us all.

 

The point that you claim that banks need reserves to make loans and I have provided evidence to the contrary which you aren't willing to explain. So now you are going in to the difference between $43 billion and $44.5 billion. LOL!!!

Anyone reading this knows what you are trying to do. Embarrassing little critter you are!