Truth To Power wrote:More like 14.
I suspect it probably is the situation, except that the accounting students taking introductory macroeconomics are probably very few, haven't yet studied banks' journal entries, and even if they have, they don't say anything because they are not confident enough of what they learned in accounting class to jeopardize their grades by contradicting their economics professors. People are amazingly sheep-like.
It's just one fatal flaw in MS econ, and not the worst one.
How? The check clears, the reserves are transferred, a different bank has the liability, but how has the total liability increased?
No, they are certified the moment the lending bank writes the higher number in the borrower's demand deposit account.
From when they are created as a liability balancing the new loan asset. Not just from when they are transferred.
That is so self-evidently wrong that I will just assume you don't know what it means.
Buildings are not money because they are not generally accepted in exchange. Definitions are basic to understanding, and the definition of money is basic to any understanding of money.
The value of the loan asset is never counted as money in any case, as it is not generally accepted in exchange. But the bank's newly created demand deposit liability IS counted as money. That is why bank lending creates money, but, e.g., loan shark lending does not.
The dollars are real from the moment they are created in the borrower's demand deposit account.
Yes, and in that case the bank has to write down the asset and make up its reserve deficit right away instead of waiting for the loan payments, which is why loan defaults reduce the money supply.
The dollars cannot be created unless there is a new asset -- the loan -- to balance the new liability. The dollars are therefore created out of the borrower's legal obligation to repay the loan, not out of thin air.
The facts decide who is right. 100% of lurkers can be just as wrong as you.
Lurkers,
Truth to Power has shown himself to be useless in a debate.
In the thread "Whether we like it or not" in Environment and Science I posted this refutation of his methods.
Lurkers, again TtP shows his true colors and methods.
He will only accept a measure of solar activity is the right one to use only after it is shown to correlate well with the known changes in global temps.
This is a perfect example of throwing out all evidence that he doesn't want to use and only using evidence that supports his theory of the cause of the known thing being investigated.
This alone should be enough for most Lurkers to ignore him.
However, there is another way TtP has shown his true colors.
In a reply to me near the bottom of the last page here, he asserted that whatever he asserts is "evidence" that he is right in making that assertion. While also asserting that whatever I and others assert is not evidence because (he thinks) we are wrong.
People, we here are like people in a debate club. TtP and I & other posters are like the students who are up front doing the debate, while you Lurkers are like the audience and the judges. Over centuries the rules of debate clubs have been found to work in that context. One of those rules is that the students up front must provide evidence with sources for what they say.
What TtP is asserting is like a very lazy student getting up front and just reviewing his reading on the subject of the debate. When asked by a judge about 'evidence', he just asserts that every word he says up there "is evidence". This, of course, is not allowed under the club's rules. Now, do you, the Lurkers, accept that TtP is equivalent to an expert witness in a courtroom testifying in his area of expertise?
You, Lurkers, should just ignore him, unless you already believe what he believes, and just want your opinions validated.
I intend to reply to all of his replies to my posts with this post. It says it all, as clearly as is possible.
TtP is not otherwise worth replying to, because his method is useless.
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- By Rich
- By Fasces
- By JohnRawls