The Creation of the Federal Reserve System (Part 4)

Discussion in 'Political Opinions & Beliefs' started by Dr. Righteous, Feb 1, 2012.

  1. Dr. Righteous

    Dr. Righteous Well-Known Member

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  2. Dr. Righteous

    Dr. Righteous Well-Known Member

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    One of the main reasons this thread has made it to Part 4 is because akphidelt2007 trolled the hell out of Parts 2 and 3. He has yet to apologize to everyone in this thread; to everyone who has every financially contributed to politicalforum.com in the history of its existence for wasting valuable server space with his endless trolling; to the mods for having to waste their time watching his posts like a hawk; and to anyone who has ever been on politicalforum.com that he has had to deal with a barage of relentless personal attacks simply for disagreeing with him.

    We expect him to do the honorable thing in this part of the thread and apologize to everybody. But given his history, that is very unlikely to occur.
     
  3. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Agreeing to not significantly cut military spending is a pretty significant compromise.

    There is no disagreement over whether or not to significantly cut military spending vs. entitlements. Significantly cutting out military spending is completely out of the question, for both "sides". The Democrats are more reluctant to cut entitlements than Republicans are, but both "sides" would ultimately much rather cut entitlements than military spending.
     
  4. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Until you guys admit that banks do in fact create money out of thin air like every person in the world already knows... than I will continue to call you guys out.

    It is an incredibly simple concept!!
     
  5. Dr. Righteous

    Dr. Righteous Well-Known Member

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    If banks can create money out of thin air, then why do banks fail? Why does the FDIC exist? Why does the Fed need to bail out banks? If banks get into trouble, why don't they just create money out of thin air?
     
  6. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Because they are held responsible for the money they create out of thin air. I don't understand why this is such a hard concept to understand.
     
  7. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Your definition of thin air includes things that were created that did not exist before. That is a flawed definition of being created out of thin air. Being created out of thin air means that something has to be created from nothing. Banks do not create money from nothing. They create money from deposits.
     
  8. akphidelt2007

    akphidelt2007 New Member Past Donor

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    When a bank types numbers in to a computer it is not taking anything from anywhere. It is creating money out of nothing. It is as simple as that.
     
  9. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Dang, if it's that easy, then I can just open up a bank and type some numbers into a computer, not taking anything from anywhere, creating money out of nothing, and become an instant billionaire. Why didn't I think of this before?
     
  10. akphidelt2007

    akphidelt2007 New Member Past Donor

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    You are confusing rules and limits to money creation with the act of creating money. Embarrassing!
     
  11. Dr. Righteous

    Dr. Righteous Well-Known Member

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    You are confusing creating money from something with creating money from nothing. Embarassing!

    Nobody has said that banks don't create money. You're being dishonest again.
     
  12. akphidelt2007

    akphidelt2007 New Member Past Donor

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    You are still thinking they are creating money from something. Embarrassing!
     
  13. Dr. Righteous

    Dr. Righteous Well-Known Member

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    If they can create money from nothing, then there would be no limit on how much money they could create.
     
  14. akphidelt2007

    akphidelt2007 New Member Past Donor

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    An arbitrary number created by humans does not represent anything tangible. It is a made up number that puts restrictions on how much money a bank can create out of thin air. Just because they say you need 10% reserves to deposits, doesn't mean reserves are creating deposits... it simply means there is a limit of the amount of deposits you can create based on how many reserves you have.

    Two completely separate events.
     
  15. Dr. Righteous

    Dr. Righteous Well-Known Member

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    If you can create something out of thin air, there is no limit to how much of it you can create. If you are creating something from something else that already exists, then you are not creating it out of "thin air". I didn't make the sandwich I ate for lunch today out of thin air, I made the sandwich from bread, mayo, and ham. If there is a limit to how much bread I can use, then there is a limit to how many sandwiches I can create from these ingredients. If I could create a sandwich out of thin air, there would be no need for me to have any of the ingredients.

    By the same token, banks don't create money out of thin air. They create money from deposits. They are required to hold 10% of their deposits as reserves. Once a bank loans to its maxiumum capability (90% of its liabilities), then no more money will be created. If a bank could create money out of thin air, it could simply create as many deposit accounts as it wanted to use to make more loans.
     
  16. akphidelt2007

    akphidelt2007 New Member Past Donor

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    The difference is you need ingredients to make a sandwich. You don't need ingredients to make money. We HAVE made up ingredients to make money to limit how much money is made. The whole concept of money is a made up concept that does not exist physically... and just because they come up with made up regulations on how much of the made up concept they can create, does not change the fact that they simply create it out of nothing.

    Read above. You are confusing limits on money creation with money creation itself.

    Its like if you were a wizard and you can make birds pop out of thin air... but your wizard master tells you if you make more than 10 birds he will kill you. The limit does not change the fact you are still making birds out of thin air.
     
  17. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Depends on how you define "money".

    Yep. Creating money requires ingredients, it can't just be done "out of thin air". It's good to see that you have finally conceded.

    By your definition, creating "out of nothing" is creating something that didn't exist before. I agree that by your definition, everything man-made was created "out of nothing". But we have already sufficiently debunked why your definition of creating something "out of nothing" is flawed.

    But banks can't just create money out of thin air. They can't just make money pop out of thin air. They have to have the excess reserves to loan it out in the first place. The excess reserves that get loaned out are the ingredients used to make the loan, which comes back in as a deposit, which is when the money is created. Just like if you run out of bread, you can't make your sandwich...if the bank runs out of cash/reserves to make loans, it can't create any more money. You haven't created the sandwich out of thin air, and the banks haven't created any money out of thin air.
     
  18. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Deposit Accounts... just like the Fed does.

    Sure it can. What ingredients are required for a bank to create money? And don't confuse requirements with ingredients.

    It has not been debunked. A sandwich is a description of things that already exist. You don't bring it in to existence, it already existed in order for you to make it. There is nothing that has to exist for a bank to create money.

    Once again you are confusing requirements with ingredients. Banks do not use anything to create money. They simply type numbers in a computer and say, this is money. The money came from no where. Unlike a sandwich which has to exist in a different form before you can make it.
     
  19. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Requirements = ingredients. You can't make a sandwich without certain requirements, ie. ingredients. Just like a bank cannot create money without certain requirements, as in the loan that the bank originates has to come from excess cash/reserves, transferrable to the payee, who deposits the money into his account, at which point money is created. The bank simply can't create money out of thin air.

    The sandwich that I ate for lunch most certainly did not exist before I brought it into existence. Listen to how silly you sound. You've backed yourself into a corner.

    Completely wrong, and you know it is wrong. If that were true, all bankers would be billionaires becuase they simply could create money out of thin air for themselves.

    Repetetive and wrong. See above.

    LOL. The sandwich didn't exist in a different form before I made it. It didn't exist at all before I made it. Listen to how silly you sound. You've backed yourself into a corner.
     
  20. akphidelt2007

    akphidelt2007 New Member Past Donor

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

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

    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.

    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.

    You lose again. Apologize immediately! Thank you!
     
  21. Dr. Righteous

    Dr. Righteous Well-Known Member

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    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.

    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.

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

    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.

    (*)(*)(*)(*) you (*)(*)(*)(*)(*)(*)(*). Stop spamming my thread.
     
  22. akphidelt2007

    akphidelt2007 New Member Past Donor

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    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!

    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.

    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.

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

    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.

    Stop responding.
     
  23. akphidelt2007

    akphidelt2007 New Member Past Donor

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    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.
     
  24. Dr. Righteous

    Dr. Righteous Well-Known Member

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    You proved no such thing.

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

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

    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:

    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:

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

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

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

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

    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.

    (*)(*)(*)(*) off
     
  25. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Baseless claim.

    Iriemon already sufficiently debunked your baseless claim:

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

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