The Creation of the Federal Reserve System (Part 4)

My guess is that you haven't read all 158 pages of this thread and that you're jumping in the middle of it, otherwise you'd see that all disturbance of facts have either been disproven or are in the process of being disproven.

 

The only thing your source said was that there is no "direct link" between reserves and loans, which is completely true. Nowhere does your source say that banks "don't need reserves to make loans".

Just wanted to make sure that we are on the same page. I can't properly educate you if you're going to go on believing things which your own sources blatantly contradict.

Sure, I'm trying to educate you and you're trolling me by spreading disinformation. Anybody reading the thread can easily see that.

 

YOU'RE CORRECT!

Please read what you wrote. I have no intention of reading 158 pages of any thread to try to understand the Federal Reserve system. No one should have to read 158 pages just to understand the system or why some people think it should end.

You may be correct about your facts being proven, but this is a headsup that what is happening here is not helping if you're goal is to convince people the Fed should end.

So what do you think about this link?

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

Is it accurate? Do you agree or disagree with it's description of the FED?

 

So please explain to all of us. If banks NEED reserves to make loans how can they make $6.25 trillion of loans with only $43 billion in required reserves and $1.5 billion in excess reserves.

Please show me the math otherwise apologize! Thank you!

 

Don't listen to Dr. R. He is one of those real life armadillo hat wearers. That link you provided is a good start on the Fed. People think the Fed has much more power than they really do.

 

The only reason I posted is I saw this thread was active on the FED subject and hoped I could finally get some information one way or the other. But it looks like the participants are more interested in trolling each other.

Meh, par for the course in "The FED" so called discussions.

Carry on.

 

I can tell you almost everything you need to know about the Fed and what they provide to the economy. But you will have to filter through all of Dr. R's BS.

 

Sorry, we posted at the same time.

Thanks for the tip, but IMHO this thread is unproductive.

 

are you talking about the creation of money through fractional reserve?

 

In a sense, even though we aren't really on a fractional reserve system anymore.

 

the reserves are being leveraged 10 to 1 or even higher and I guess you can call it new money but not in the same way the fed can create money......the bank eventually has to pay it back if the deposits are withdrawn...not so with the fed!

 

akphidelt is mixing up the leveraging of reserves through fractional reserve with the actual physical creation of money by the fed. The bank eventually needs to pay it back if the money is withdrawn....not so with the fed!

 

No I'm not. What makes you think I mixed that up? Lol

 

In 2007 there were $6.25 trillion in loans and $43 billion required reserves. They are loaning at more than 100 to 1 and there is no correlation between reserves and loans.

 

but although you can make the arguememt that its new money in a way its not......I mean there are conditions to that new money......if the depositor withdraws the money then the money contracts.....or if someone defaults on a loan it also contracts making the bank vulnerable....The fed on the otherhand can just create all the money it wants with no strings attached!

 

but its a vulnerable system...if enough people default or withdraw at the same time this can make the bank insolvent!

 

Who cares if there are strings attached. Banks still create money.

 

No they can't. That's what the Federal Reserve is for. The only way a bank will fail is through defaults on loans and investments... there is no solvency risk in the banking system any more.

 

The Fed is at the brink of insolvency... PrezBO better get another war going to preserve the state!

 

OK then.....with the exception of fractional reserve....please tell me how else banks can dreate money?

 

well yes and no.....I mean its not really money but rather borrowed money as eventually the bank needs to pay it back!

 

Deposit Accounts = Money. Very few people use cash to transact these days.

 

and to keep people's minds off the disasterous economy LOL!

 

but deposit accounts are money unless of course the money came from another bank that also leveraged their own reserves......still at some point the money needs to be repaid...this is what makes the banks vulnerable!

 

Here's a recent article about Fed policy you may find interesting...

http://mises.org/daily/5888/The-Feds-QuasiFiscal-Policies