The Creation of the Federal Reserve System (Part 4)

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

  1. akphidelt2007

    akphidelt2007 New Member Past Donor

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    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.

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

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

    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.

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

    The pieces of the sandwich naturally exist.

    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.

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

    Quit lying and being annoying
     
  2. akphidelt2007

    akphidelt2007 New Member Past Donor

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    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.

    [​IMG]
     
  3. akphidelt2007

    akphidelt2007 New Member Past Donor

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    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/feds/2010/201041/201041pap.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.
     
  4. Dr. Righteous

    Dr. Righteous Well-Known Member

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    The papers you provided proved no such thing.

    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.

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

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

    Blatant contradiction of your previous claims:

    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.

    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.

    So what?

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

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

    Says the pot to the kettle.
     
  5. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Nice graph. It in no way proves anything you said.
     
  6. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Not a single source once again. You really think I'm going to believe your opinions? Lol!!

    #1) You did not bring anything in to existence when you made a sandwich. You took things that existed and assembled them in to what we call a sandwich. Money on the other hand isn't assembled by anything. It is simply a metaphysical creation.

    #2) Banks don't need reserves to make loans. I have provided 3 sources that prove that fact. And I will take your denying of these three sources as you clearly not wanting to discuss actual facts. So with that, if you do not start providing sources for your lying, I am not going to respond. And if you don't provide sources and continue lying, I will ask you to apologize to everyone before you make a comment that can not be backed by sources. Thank you!
     
  7. Dr. Righteous

    Dr. Righteous Well-Known Member

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    There is nothing in your quote that suggests that banks do not need reserves to make loans.
     
  8. akphidelt2007

    akphidelt2007 New Member Past Donor

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    If banks needed reserves to make loans as you say, than banks couldn't fund $6.25 trillion in loans with only $45 billion in reserves. Simple math there bro. Want me to draw you a picture?
     
  9. Dr. Righteous

    Dr. Righteous Well-Known Member

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    I don't need to cite a source to tell you that your sources aren't saying what you're saying they're saying.

    You have already admitted that I bring the sandwich into existence when I make it. You're being dishonest again.

    This in no way proves that banks create moeny out of thin air.

    Show me a quote from one of your sources that says banks don't need reserves to make loans.

    I haven't denied any of your sources. I've denied your incorrect interpretation of those sources.

    That would be a first for you, since all you do is troll.

    You owe everybody a million apologies, and yet you haven't given one. Shows how honorable you are.
     
  10. Dr. Righteous

    Dr. Righteous Well-Known Member

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    I'd rather you provided a credible source that supports the baseless figures that you've claimed here.
     
  11. akphidelt2007

    akphidelt2007 New Member Past Donor

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    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 enough to fund bank lending. Indeed, if we consider the fact that reserve balances held at the Federal Reserve were about $15 billion and required reserves were about $43 billion, the tight link drawn in the textbook transmission mechanism from reserves to money and bank lending seems all the more tenuous.

    Bank loans are shown as the dashed line in the upper panel and have a similar trend to that of M2. Of course trending nominal variables will often exhibit spurious correlation, but it is clear that there is no link between reserves and loans.


    Source: http://www.federalreserve.gov/pubs/feds/2010/201041/201041pap.pdf

    Please apologize or provide a source that disproves the Federal Reserve... thank you!! Oh yea, get slapped in the face with facts! (*)(*)(*)(*) it feels good to be smart.
     
  12. Dr. Righteous

    Dr. Righteous Well-Known Member

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    OK. I was confused because this completely contradicts a statement you made previously:

    Which is unsurprising because you constantly contradict yourself.
    Now we can work on you proving your claim that "banks don't need reserves".

    You ignore half of my posts because they completely annihilate you. So you get scared, run away, and hide. A smart person wouldn't do that, they would be able to consistently defend their comments, which you have failed to do.
     
  13. akphidelt2007

    akphidelt2007 New Member Past Donor

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    What did I contradict myself on. Please provide facts instead of lies. Thanks!

    And you still have to provide a source to prove anything I'm saying is wrong. These are actual source from the Federal Reserve. Please explain to me how we can have $45 billion in reserves and $6.25 trillion in loans if banks need reserves to make loans. Thanks!
     
  14. Dr. Righteous

    Dr. Righteous Well-Known Member

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    You said that there were $10 billion in reserves in banks in 2007, which is a totally baseless claim and contradicts your own source says that there were $600 billion in reservable deposits in 2007.

    I see nothing that says that banks had "$45 billion in reserves". I see $600 billion in reservable deposits, which translates roughly to $6 trillion in loans, which is about what you would expect given that loans were actually $6.25 trillion in 2007.
     
  15. akphidelt2007

    akphidelt2007 New Member Past Donor

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    $10 billion in reserves held at the Federal Reserve bank. Banks had $33 billion in currency held in bank vaults making the total $43 billion in reserves.

    Alright, so banks don't need reserves to make loans than do they?
     
  16. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Yes, $600 billion in "reservable deposits". Please put on your educated hat and try to understand what that means.

    There was not $600 billion in reserves. There was $43 billion in reserves which it clearly states. The fact that you deny reality is scary!!
     
  17. akphidelt2007

    akphidelt2007 New Member Past Donor

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    You are getting yourself all confused. I'll try to walk you through this so you can figure it out yourself with out me giving you all the answers.

    There was $6.25 trillion loans. Of those $6.25 trillion less than 10% of them were "reservable". Of that 10% banks had $43 billion to meet their reserve requirements.

    Now I will ask you again, if banks NEED reserves to make loans than how can they make $6.25 trillion in loans with only $43 billion in reserves?
     
  18. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Why would we expect there to be $600 billion in reserves?
     
  19. akphidelt2007

    akphidelt2007 New Member Past Donor

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    I never said we should expect there to be $600 billion in reserves.

    You said banks need reserves to make loans. How can $43 billion in reserves make $6.25 trillion in loans?
     
  20. Dr. Righteous

    Dr. Righteous Well-Known Member

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    This is a response to a deleted post; it's not worth addressing.
     
  21. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Show me a source that says there were $43 billion in reserves in banks in 2007.
     
  22. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Here we go again...

    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. Indeed, if we consider the fact that reserve balances held at the Federal Reserve were about $15 billion and required reserves were about $43 billion...

    Of course trending nominal variables will often exhibit spurious correlation, but it is clear that there is no link between reserves and loans.


    Source: http://www.federalreserve.gov/pubs/feds/2010/201041/201041pap.pdf

    [​IMG]

    Source: http://research.stlouisfed.org/fred2/graph/?s[1][id]=WRESBAL



    2 Sources from the Federal Reserve. I demand a formal apology, thank you!
     
  23. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Reserves = Required Reserves + Excess Reserves

    Your source says required reserves are $43 billion. It says nothing about Excess Reserves, which is how banks were able to loan as much as they did.
     
  24. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Can you please just admit that you are wrong and that I know what I'm talking about? You are doing everything possible to skate around the fact that even the Federal Reserve says there is no link between reserves and loans.

    [​IMG]

    Now what is your next excuse?

    And can you please start looking up facts before you spout off nonsense. The fact you didn't even know how many excess reserves there were but made a claim that, that is how the banks lent the extra money is beyond hilarious!!!
     
  25. Dr. Righteous

    Dr. Righteous Well-Known Member

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    The Federal Reserve says no such thing. You're just making stuff up now.

    That graph only counts excess reserves that haven't been lent out, ie. still in the vaults.
     

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