Crantag wrote:You said "banks have a license to create dollars". I said this was a misstatement of the systemic process of fractional reserve banking. You then discussed fractional reserve banking as if it was a contradiction to what I had said when it was the same thing I said. Your first statement basically claimed that banks don't mind lending below inflation because they simply can conjure up dollars on a transactional basis. This is somewhat true when you include interbank borrowing and borrowing from the Fed, though banks of course still have to pay interest. I'm not convinced that banks simply don't mind lending below inflation but possibly. Perhaps that's the point you should clarify if you can.
In any case the existence of fractional reserve banking is not a new insight by any means. It's a fundamental aspect of modern banking and monetary regulation.
1] Your constant fixation on things like view counts and your calls to 'lurkers' is somewhat annoying. I think you are trying to stroke your ego.
1] I talk to the lurkers, because I find it annoying to talk to posters here who con't seem to understand how reality works. I answer their questions or refute their points, and they come back with the same assertion as if I had said nothing.
My experience is that I'm the only one on line who ever admits that they or I am wrong. So, if they ignore what I say, then why should I keep talking? My answer is that the other people who read threads may be educated by what I say.
The view counts indicate if there are people reading certain threads. For example, this thread has 1650 views since I posted my last reply above. But, there are also 7 new replies.
As for the rest of your reply, I don't see any part that asserts that I got any fact or conclusion wrong, except my wording that this law authorizes banks to create money while making loans by my saying they are "licensed to create dollars".
So, you just disagreed with my use of the word 'licensed', not with the concept of what the law lets them do.
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Add with an edit.
I have to keep harping on this point because people keep asserting that banks loan out their depositors' money. It sounded like you did this in this thread, IIRC.
Now, you agreed with me on how modern fractional reserve banking works.
Yet, actually you were and are wrong that banks need deposits to make loans, because the loan itself creates deposits in some other bank when the money is spent, and this deposit can be accessed by the 1st bank by borrowing from that bank in the overnight market.
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