Thread: The Creation of the Federal Reserve System (Part 4)

Originally Posted by akphidelt2007

They need reserves to settle payments between banks.

That's not the only reason they need reserves. They need reserves to meet demand withdrawals as well as to meet the Fed's required reserve ratio.

Originally Posted by akphidelt2007

They don't need reserves to create money. Been over this 100 times. Stop embarrassing yourself.

Fabrication. A bank needs excess reserves in order to make loans, which come back in as a deposit, at which point money has been created. A bank cannot create money without loaning money first.

Originally Posted by akphidelt2007

Sure it did. The bread, meat, and cheese had to exist.

So what? Bread is not a sandwich. Meat is not a sandwich. Cheese is not a sandwich.

Originally Posted by akphidelt2007

Once again you continue making yourself look like a fool. Just because banks have requirements on how much they can create doesn't mean they don't create money out of thin air.

I agree that based on your definition of "thin air" that banks can create money out of thin air. But by your definition, everything man-made has been created out of thin air. Any reasonable person would realize that this is an absurd claim, and that your definition of "thin air" is flawed.

Originally Posted by akphidelt2007

Sure it did. A sandwich is just a description of two pieces of bread with fillings inside. It most definitely existed before you put those pieces together.

And meat is just a description of a butchered animal. Cheese is just a description of fat extracted from milk. Bread is just a description of ground up flour. Did the cheese exist before it was made? No. Did the meat exist before it was made? No. Did the bread exist before it was made? No. Did the sandwich exist before I made it? No.

Your logic is faulty, you've backed yourself into a corner and you're grasping for straws trying to get out of it. You just end up sounding silly, which is why nobody on this forum takes you seriously.

Originally Posted by akphidelt2007

You lose again. Apologize immediately! Thank you!

(*)(*)(*)(*) you (*)(*)(*)(*)(*)(*)(*). Stop spamming my thread.

Originally Posted by Dr. Righteous

Fabrication. A bank needs excess reserves in order to make loans, which come back in as a deposit, at which point money has been created. A bank cannot create money without loaning money first.

This is a lie and you know it. Banks do not need excess reserves in order to make loans. Already been proven a million times. Stop lying, thank you!

So what? Bread is not a sandwich. Meat is not a sandwich. Cheese is not a sandwich.

A sandwich is the formulation of those three things. You didn't bring it in to existence, you simply took things that existed and assembled them in to what we call a sandwich.

I agree that based on your definition of "thin air" that banks can create money out of thin air. But by your definition, everything man-made has been created out of thin air. Any reasonable person would realize that this is an absurd claim, and that your definition of "thin air" is flawed.

No it doesn't. The key word is "in to existence". You don't bring a sandwich in to existence since the pieces already existed.

And meat is just a description of a butchered animal. Cheese is just a description of fat extracted from milk. Bread is just a description of ground up flour. Did the cheese exist before it was made? No. Did the meat exist before it was made? No. Did the bread exist before it was made? No. Did the sandwich exist before I made it? No.

Exactly, you break down a sandwich in to a natural occurring existence. Unlike money. Thanks for proving my point.

Your logic is faulty, you've backed yourself into a corner and you're grasping for straws trying to get out of it. You just end up sounding silly, which is why nobody on this forum takes you seriously.

You can't lie yourself out of this. You can't bring something that already exists in to existence. You can move things around that exists to fulfill a man made description... but you didn't actually bring anything in to existence and you definitely did not create it from thin air. Please apologize once again for lying.

(*)(*)(*)(*) you (*)(*)(*)(*)(*)(*)(*). Stop spamming my thread.

Stop responding.

You keep saying banks need reserves to make loans. Yet before the recent collapse and the Fed pumping the system full of excess reserves, there was less than $45 billion of reserves/vault cash and there was $6.25 trillion in loans.

Please explain how a bank needs reserves to make a loan if there isn't enough reserves in existence to even cover the 10% required reserve ratio.

I'm waiting for a reply that includes legitimate sources... otherwise an apology is expected! Thank you.

Originally Posted by akphidelt2007

This is a lie and you know it. Banks do not need excess reserves in order to make loans. Already been proven a million times. Stop lying, thank you!

You proved no such thing.

Originally Posted by akphidelt2007

A sandwich is the formulation of those three things.

Correct. The formulation known as my sandwich didn't physically exist until I made it.

Originally Posted by akphidelt2007

You didn't bring it in to existence, you simply took things that existed and assembled them in to what we call a sandwich.

Nonsense. I brought the sandwich into physical existence using the physically existing pieces.

Originally Posted by akphidelt2007

No it doesn't. The key word is "in to existence". You don't bring a sandwich in to existence since the pieces already existed.

The individual pieces did not exist as a physical sandwich until I created the physical sandwich. Per your definition of creating out of thin air:

Originally Posted by akphidelt2007

Creating something out of thin air means to make in to existence something that didn't exist before.

Sandwiches are created out of thin air. I agree that banks create money out of thin air, per your own definition. Everything man-made is created out of thin air, per your own definition.

Once you realized how silly this basic logic made your dishonest definition sound, you backed yourself into a corner by making absurd claims like that a sandwich exists before you assemble it. This contradicts a previous claim you made:

Originally Posted by akphidelt2007

You putting the pieces together and calling it a sandwich was created out of thin air since a sandwich does not "exist" naturally.

How can a sandwich, which does not exist naturally, already exist independent of me assembling the individual components together?

Originally Posted by akphidelt2007

Exactly, you break down a sandwich in to a natural occurring existence. Unlike money. Thanks for proving my point.

This in no way proves your point that banks create money out of thin air.

Originally Posted by akphidelt2007

You can't lie yourself out of this. You can't bring something that already exists in to existence.

Contradicts your previous claim that a sandwich doesn't exist naturally:

Originally Posted by akphidelt2007

You putting the pieces together and calling it a sandwich was created out of thin air since a sandwich does not "exist" naturally.

How can a sandwich, which does not exist naturally, already exist independent of me assembling the individual components together?

Originally Posted by akphidelt2007

You can move things around that exists to fulfill a man made description... but you didn't actually bring anything in to existence and you definitely did not create it from thin air.

Sure I did. I brought the sandwich into physical existence by putting the pre-existing meat and pre-existing cheese between two slices of pre-existing bread.

Originally Posted by akphidelt2007

Please apologize once again for lying.

(*)(*)(*)(*) off

Originally Posted by akphidelt2007

You keep saying banks need reserves to make loans. Yet before the recent collapse and the Fed pumping the system full of excess reserves, there was less than $45 billion of reserves/vault cash and there was $6.25 trillion in loans.

Baseless claim.

Originally Posted by akphidelt2007

Please explain how a bank needs reserves to make a loan if there isn't enough reserves in existence to even cover the 10% required reserve ratio.

Iriemon already sufficiently debunked your baseless claim:

Originally Posted by Iriemon

Originally Posted by akphidelt2007

Iriemon, you are a smart dude. Read this paper written by the Federal Reserve... I'm not feeding you bull(*)(*)(*)(*).

For perspective, M2 averaged about $7¼ trillion in 2007. In contrast, reservable deposits were about $600 billion, or about 8 percent of M2. Moreover, bank loans for 2007 were about $6¼ trillion. This simple comparison suggests that reservable deposits are in no way sufficient to fund bank lending.

Source: http://www.federalreserve.gov/pubs/f.../201041pap.pdf

You never provide any sources whatsoever. You are too stubborn to try to learn how the system really works.

It has nothing to do with stubborness. Your own data completely proves your wrong.

With $600 billion in reserves, and a 10% reserve ration, if bank lend to capacity, you'd expect $6 trillion in loans and a little less than $7 trillion in deposits.

In other words, the data perfectly correlates what you would expect with a 10% reserve, which is the general rule.

You know, I try to educate you and be reasonable, but when you say flat out lies like that I'm about to turn you off. I provide sources for my statements more than any other person on this board. That's (*)(*)(*)(*)ing bull(*)(*)(*)(*). (*)(*)(*)(*)(*)(*)(*).

Originally Posted by akphidelt2007

I'm waiting for a reply that includes legitimate sources... otherwise an apology is expected! Thank you.

Data from your own source of the Federal Reserve proves you wrong.

Originally Posted by Dr. Righteous

You proved no such thing.

I have provided 3 papers from the Federal Reserve that proves it. I will just take this as you admitting that you will believe what you believe regardless of facts. Very intelligent of you, lol.

Correct. The formulation known as my sandwich didn't physically exist until I made it.

That's a better way of looking at it. You created a formulation out of thin air, you didn't bring anything in to existence.

Nonsense. I brought the sandwich into physical existence using the physically existing pieces.

You didn't bring anything in to existence other than a human made description of an assembly of existing pieces. You didn't bring anything tangible in to existence.

The individual pieces did not exist as a physical sandwich until I created the physical sandwich. Per your definition of creating out of thin air:

The pieces existed, therefore you didn't bring anything in to existence other than a formulation. Unless you can create the sandwich out of wood and grass, than you really didn't do anything other than take existing pieces and put them together. Unlike money which doesn't require pieces to be put together.

Sandwiches are created out of thin air. I agree that banks create money out of thin air, per your own definition. Everything man-made is created out of thin air, per your own definition.

Yes, words are created out of thin air. But since money is not a natural occurring resource, the commodity itself has to be created by humans out of thin air. Unlike a sandwich which is just a description of things that already exist.

Once you realized how silly this basic logic made your dishonest definition sound, you backed yourself into a corner by making absurd claims like that a sandwich exists before you assemble it. This contradicts a previous claim you made:

You are the one comparing making a sandwich to making money, lol!!! Embarrassing bro!

How can a sandwich, which does not exist naturally, already exist independent of me assembling the individual components together?

The pieces of the sandwich exist. You don't bring anything in to existence when you make a sandwich, since a sandwich is just a description of things that already exist being assembled.

This in no way proves your point that banks create money out of thin air.

Where else does money come from? Do banks go in to your backyard and pull USD off your USD tree?

Contradicts your previous claim that a sandwich doesn't exist naturally:

The pieces of the sandwich naturally exist.

How can a sandwich, which does not exist naturally, already exist independent of me assembling the individual components together?

Because you didn't bring anything in to existence, you took things that already exist and assembled them in to a man made concept, called a sandwich.

Sure I did. I brought the sandwich into physical existence by putting the pre-existing meat and pre-existing cheese between two slices of pre-existing bread.

You did not bring it in to physical existence since the pieces already existed. Very simple stuff bro.

(*)(*)(*)(*) off

Quit lying and being annoying

Originally Posted by Dr. Righteous

Baseless claim.

Iriemon already sufficiently debunked your baseless claim:

Data from your own source of the Federal Reserve proves you wrong.

I demand an immediate apology!! Iriemon has not debunked my claim at all. Here is the actual data which the Federal Reserve used in it's source.

I demand an immediately apology to me and the Federal Reserve. Thanks!!

These facts imply that the tight link suggested by the multiplier between reserves and money and bank lending does not exist.

Finally, the assumed link in the textbook version of the money multiplier between the creation of loans and the creation of demand deposits is dubious. According to the standard multiplier theory, an increase in bank lending is associated with an increase in demand deposits. The data as discussed below do not reflect any such link.

Source: http://www.federalreserve.gov/pubs/f.../201041pap.pdf


From now on if you are going to speak please provide sources that back up all your claims. Otherwise, you are just lying and making yourself look like a fool! Immediate apology requested.

Originally Posted by akphidelt2007

I have provided 3 papers from the Federal Reserve that proves it. I will just take this as you admitting that you will believe what you believe regardless of facts. Very intelligent of you, lol.

The papers you provided proved no such thing.

Originally Posted by akphidelt2007

That's a better way of looking at it. You created a formulation out of thin air, you didn't bring anything in to existence.

You didn't bring anything in to existence other than a human made description of an assembly of existing pieces. You didn't bring anything tangible in to existence.

The pieces existed, therefore you didn't bring anything in to existence other than a formulation. Unless you can create the sandwich out of wood and grass, than you really didn't do anything other than take existing pieces and put them together.

It's good to see that you are finally admitting that you were completely wrong about your claim that I don't bring the human-made description/formulation/sandwich into existence when I make it.

Originally Posted by akphidelt2007

Unlike money which doesn't require pieces to be put together.

What does that have to do with whether or not money is created out of thin air?

Originally Posted by akphidelt2007

Yes, words are created out of thin air. But since money is not a natural occurring resource, the commodity itself has to be created by humans out of thin air. Unlike a sandwich which is just a description of things that already exist.

You admitted yourself several times that the sandwich is brought into existence when you make it:

Originally Posted by akphidelt2007

You didn't bring anything in to existence other than a human made description of an assembly of existing pieces. You didn't bring anything tangible in to existence.

The pieces existed, therefore you didn't bring anything in to existence other than a formulation. Unless you can create the sandwich out of wood and grass, than you really didn't do anything other than take existing pieces and put them together.

Originally Posted by akphidelt2007

You are the one comparing making a sandwich to making money, lol!!! Embarrassing bro!

I'm doing no such thing. You're being dishonest again.

I'm demonstrating the flaw in your definition of creating something out of thin air. By your definition, not only is money created out of thin air, but sandwiches are created out of thin air as well. Anybody with an ounce of common sense knows that sandwiches are not created out of thin air, they are created out of things that already exist. You were attempting to be deceptive by defining "creating out of thin air" the way you did so that it would fit your dubious claim that banks create money out of thin air. It immediately blew up in your face once the illogic of your definition was pointed out to you, and you've now spent days doing damage control on it. It all comes down to you being dishonest once again.

Originally Posted by akphidelt2007

The pieces of the sandwich exist. You don't bring anything in to existence when you make a sandwich, since a sandwich is just a description of things that already exist being assembled.

Blatant contradiction of your previous claims:

Originally Posted by akphidelt2007

You didn't bring anything in to existence other than a human made description of an assembly of existing pieces. You didn't bring anything tangible in to existence.

The pieces existed, therefore you didn't bring anything in to existence other than a formulation. Unless you can create the sandwich out of wood and grass, than you really didn't do anything other than take existing pieces and put them together.

Please explain how I don't bring anything in existence when I make a sandwich, if you just said that making a sandwich brings a human-made description/formulation into existence.

Originally Posted by akphidelt2007

Where else does money come from? Do banks go in to your backyard and pull USD off your USD tree?

They create money by deposits being multiplied. They can't just create it out of thin air. If they could do that, there would be no need for reserves, the FDIC, the Fed, because no banks would ever fail.

Originally Posted by akphidelt2007

The pieces of the sandwich naturally exist.

So what?

Originally Posted by akphidelt2007

Because you didn't bring anything in to existence, you took things that already exist and assembled them in to a man made concept, called a sandwich.

That doesn't answer the question. How can a sandwich exist if it doesn't exist?

Originally Posted by akphidelt2007

You did not bring it in to physical existence since the pieces already existed. Very simple stuff bro.

So the sandwich physically existed before I made it? LOL. Don't understand casualty, do you?

Originally Posted by akphidelt2007

Quit lying and being annoying

Says the pot to the kettle.

Originally Posted by akphidelt2007

I demand an immediate apology!! Iriemon has not debunked my claim at all. Here is the actual data which the Federal Reserve used in it's source.

Nice graph. It in no way proves anything you said.