I've been telling you that MS econ is based on false assumptions, why doesn't this change your mind? - Page 4 - Politics Forum.org | PoFo

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#15195386
Steve_American wrote:@Truth To Power,
OH, you meant to tiny percentage of deposits into banks that are made with cash.

No, any deposit, because whether it is cash or a bank instrument, it increases the bank's reserves by that amount.
I don't know if you are right, but I doubt it and it is so tiny it hardly matters.

I am definitely right, and being right matters. The fact that the square root of two is irrational depends on a number so tiny that it is smaller than any number but zero.
OTOH, money is fungible, so I know banks do spend their income from interest, etc. Who is to say that they are spending the cash being deposited?

I didn't say they were spending it, only that they could, except the required reserves. That makes it money.
I watched the video posted somewhere here about crypto being a scam. In it it was asserted that the amount of electric power bring used to 'mine' crypto is more that the amount used by each of many nations in a year. This is a total waste, IMO. The video asserted that it is a ponzi scheme.

I am also skeptical about crypto, but I don't understand it well enough to say it can never be money. I do understand it well enough to say that it is not money yet.
#15195450
Truth To Power wrote:No, any deposit, because whether it is cash or a bank instrument, it increases the bank's reserves by that amount.

I am definitely right, and being right matters. The fact that the square root of two is irrational depends on a number so tiny that it is smaller than any number but zero.

I didn't say they were spending it, only that they could, except the required reserves. That makes it money.

I am also skeptical about crypto, but I don't understand it well enough to say it can never be money. I do understand it well enough to say that it is not money yet.

Lurkers, TtP said cash deposited, so I took him to mean cash that was deposited. Now he claims that checks deposited and cleared through the Fed. system can also be deposited.

TtP and I just flatly totally disagree on the question of can bank lend out their depositors money.
He says they can, but they don't. Lurkers, think about this, if banks can create dollars by making a loan, why in hell would they reduce their assets to loan out money they are keeping in trust for their depositors.
And I say that they can't. I've been told by several MMT expert economists that banks add to the money supplu with every loan, and this is why no central bank can control the money supply.

He has provided no link to any evidence to support his opinion.
I have posted a link, 3 times I think, to an article in 2014 about a bank loan of 200K euros as an experiment that proved that banks don't lend their depositors money, they create new money. I have also pointed you to Bill Mitchell's blog where he agrees with me, also to, Stephanie Kelton, and Randall Wray, all MMTers.
This is a big deal.
You lurkers should do a google search, and find a source you believe.

He and I can keep saying "I'm right, and you ARE WRONG" all year and convince nobody.
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#15195507
Steve_American wrote:Lurkers, TtP said cash deposited, so I took him to mean cash that was deposited. Now he claims that checks deposited and cleared through the Fed. system can also be deposited.

You changed the subject to "money." Checks deposited do not create additional deposit money as a deposit of cash does, but only transfer it. However, the bank can still spend the transferred deposit money that is not required for reserves. You are correct that it is only the cash deposits that create additional deposit money: if all deposits did, the money supply would skyrocket out of control. It is also true that the amount of deposit money created is small relative to the amount of debt money, but it is significant relative to the amount of fiat money.
TtP and I just flatly totally disagree on the question of can bank lend out their depositors money.

That depends on what you call "their depositors' money." If you mean the bank's liability in the depositor's account, then no, they cannot lend that out because it is a liability of the bank, not an asset. If you mean the cash a depositor deposited in return for the account balance increase, then yes, the bank can in theory lend it out the same way a loan shark lends out actual currency. They just don't do it because they have a much better system.
He says they can, but they don't. Lurkers, think about this, if banks can create dollars by making a loan, why in hell would they reduce their assets to loan out money they are keeping in trust for their depositors.

Why they would do it is a completely different question from whether they could do it. And banks are not in the business of "keeping money in trust" for their depositors. The money customers deposit adds to the bank's reserves so they can create more debt money and thus more interest income for themselves.
And I say that they can't. I've been told by several MMT expert economists that banks add to the money supply with every loan, and this is why no central bank can control the money supply.

They are correct.
He has provided no link to any evidence to support his opinion.

:roll: What's to stop a borrower from just taking out the loan proceeds in cash that a depositor just deposited? In fact, that is what commercial borrowers sometimes do when they need cash for the till.
I have posted a link, 3 times I think, to an article in 2014 about a bank loan of 200K euros as an experiment that proved that banks don't lend their depositors money, they create new money. I have also pointed you to Bill Mitchell's blog where he agrees with me, also to, Stephanie Kelton, and Randall Wray, all MMTers.
This is a big deal.
You lurkers should do a google search, and find a source you believe.

That is perfectly true, but it only confirmed what they could have learned by consulting any good accounting textbook that describes banks' journal entries.
#15195626
Truth To Power wrote:You changed the subject to "money." Checks deposited do not create additional deposit money as a deposit of cash does, but only transfer it. However, the bank can still spend the transferred deposit money that is not required for reserves. You are correct that it is only the cash deposits that create additional deposit money: if all deposits did, the money supply would skyrocket out of control. It is also true that the amount of deposit money created is small relative to the amount of debt money, but it is significant relative to the amount of fiat money.

That depends on what you call "their depositors' money." If you mean the bank's liability in the depositor's account, then no, they cannot lend that out because it is a liability of the bank, not an asset. If you mean the cash a depositor deposited in return for the account balance increase, then yes, the bank can in theory lend it out the same way a loan shark lends out actual currency. They just don't do it because they have a much better system.

Why they would do it is a completely different question from whether they could do it. And banks are not in the business of "keeping money in trust" for their depositors. The money customers deposit adds to the bank's reserves so they can create more debt money and thus more interest income for themselves.

They are correct.

:roll: What's to stop a borrower from just taking out the loan proceeds in cash that a depositor just deposited? In fact, that is what commercial borrowers sometimes do when they need cash for the till.

That is perfectly true, but it only confirmed what they could have learned by consulting any good accounting textbook that describes banks' journal entries.

In reply to the highlighted part ---

Lurkers, when I 1st saw that article about the 200K euroo loan in 2014. I did some digging.
I found an article fairly soon after the 200K article was published in which the experts at the Bank of England accepted the results. OK, fine.

But, then I saw another article by another expert at the Bank of England that was published even later in which it was taken back and the old 'banks lend their depositor's money' was reaffirmed.

So, this point is still confusing people. TtP is just wrong, that any textbook will set you straight.

MMTers will tell you that it is still being taught in Economics 101 or 102. IIRC, this is because it is a key assumption that MS econ. needs so that it can factor banks out of the logic, by claiming that savers are necessary for business loans to invest. That, saving is recycled back into the economy and not just parked. MS econ. likes the theory and resists correcting it. According to MMT economists with PhDs.
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#15195665
Steve_American wrote:Lurkers, when I 1st saw that article about the 200K euroo loan in 2014. I did some digging.
I found an article fairly soon after the 200K article was published in which the experts at the Bank of England accepted the results. OK, fine.

But, then I saw another article by another expert at the Bank of England that was published even later in which it was taken back and the old 'banks lend their depositor's money' was reaffirmed.

Can you provide a source for that second article? I suspect it is an exercise in deception in which true statements are recast to make it seem like they mean something they do not mean.
So, this point is still confusing people. TtP is just wrong, that any textbook will set you straight.

I didn't say "any textbook." I said any good ACCOUNTING textbook that describes banks' JOURNAL ENTRIES will set you straight. Many economics textbooks, including "Nobel" economics laureate Greg Mankiw's introductory macro text, continue to teach the fairy tale version (banks lend out customer deposits). But I have taught economics, and some macroeconomics textbooks -- including, rest assured, all the ones I have used -- do describe private commercial banks' debt money issuance process accurately. It's quite remarkable that there could be totally different textbook versions of what is a crucial economic phenomenon, but that's modern mainstream neoclassical economics for you.
MMTers will tell you that it is still being taught in Economics 101 or 102. IIRC, this is because it is a key assumption that MS econ. needs so that it can factor banks out of the logic, by claiming that savers are necessary for business loans to invest. That, saving is recycled back into the economy and not just parked. MS econ. likes the theory and resists correcting it. According to MMT economists with PhDs.

This may be different in different countries. I have not taught economics in the USA, and maybe there they teach the fairy tale version where banks lend out depositors' money.
#15195705
Truth To Power wrote:Can you provide a source for that second article? I suspect it is an exercise in deception in which true statements are recast to make it seem like they mean something they do not mean.

I didn't say "any textbook." I said any good ACCOUNTING textbook that describes banks' JOURNAL ENTRIES will set you straight. Many economics textbooks, including "Nobel" economics laureate Greg Mankiw's introductory macro text, continue to teach the fairy tale version (banks lend out customer deposits). But I have taught economics, and some macroeconomics textbooks -- including, rest assured, all the ones I have used -- do describe private commercial banks' debt money issuance process accurately. It's quite remarkable that there could be totally different textbook versions of what is a crucial economic phenomenon, but that's modern mainstream neoclassical economics for you.

This may be different in different countries. I have not taught economics in the USA, and maybe there they teach the fairy tale version where banks lend out depositors' money.

TtP, finally makes a post that is not riddled with false assertions. Just one false or maybe a few false assertions will make anyone's argument worthless. In logic we are NEVER allowed to prove things with even one false assertion.

OK, TtP did say "any good accounting textbook", however there are 2 KEY words there, 'good' and 'accounting'.
When he specifies 'good' textbooks only, he can always say he was right, while giving the impression that almost all textbooks contin the info being discussed.
Like TtP said might be true, in the US and Aust., etc., almost all econ. depts. are run by MS economists. They would not teach the correct facts in an accounting class as they teach the opposite facts in an introduction to macroeconomics class. It would make them look like the fools that they actually are.

Also, TtP reputation has been shredded in my opinion by his repeatedly confidently asserting things that are false. So, why should I or we believe him when he asserts that he has taught economics classes?

TtP, I could not find the paper I saw about 3 years ago. I looked at the 1st 5 pages of my search with "bank of england 2014 depositors money".

I did find this interesting paper on page 5 of my search on the subject written in 2015.

https://www.weforum.org/agenda/2015/06/ ... come-from/

Where do bank loans come from? [Bold and size in original]
From it I quote the 1st page or so ---
Problems in the banking sector played a critical role in triggering and prolonging the Great Recession. Unfortunately, macroeconomic models were initially not ready to provide much support in thinking about the interaction of banks with the macro economy. This has now changed.

However, there remain many unresolved issues (Adrian et al. 2013) including:

The reasons for the extremely large changes to (and co-movements of) bank assets and bank debt;
The extent to which the banking sector triggers or amplifies financial and business cycles; and
The extent to which monetary and macro-prudential policies should lean against the wind in financial markets.
New research

In our new work, we argue that many of these unresolved issues can be traced back to the fact that virtually all of the newly developed models are based on the highly misleading ‘intermediation of loanable funds’ theory of banking (Jakab and Kumhof 2015). We argue instead that the correct framework is ‘money creation’ theory.

In the intermediation of loanable funds model, bank loans represent the intermediation of real savings, or loanable funds, between non-bank savers and non-bank borrowers;

Lending starts with banks collecting deposits of real resources from savers and ends with the
lending of those resources to borrowers. The problem with this view is that, in the real world, there are no pre-existing loanable funds, and intermediation of loanable funds-type institutions – which really amount to barter intermediaries in this approach – do not exist.

The key function of banks is the provision of financing, meaning the creation of new monetary purchasing power through loans, for a single agent that is both borrower and depositor.

Specifically, whenever a bank makes a new loan to a non-bank (‘customer X’), it creates a new loan entry in the name of customer X on the asset side of its balance sheet, and it simultaneously creates a new and equal-sized deposit entry, also in the name of customer X, on the liability side of its balance sheet.

The bank therefore creates its own funding, deposits, through lending. It does so through a pure bookkeeping transaction that involves no real resources, and that acquires its economic significance through the fact that bank deposits are any modern economy’s generally accepted medium of exchange.

The real challenge

This money creation function of banks has been repeatedly described in publications of the world’s leading central banks (see McLeay et al. 2014a for an excellent summary). Our paper provides a comprehensive list of supporting citations and detailed explanations based on real-world balance sheet mechanics as to why intermediation of loanable funds-type institutions cannot possibly exist in the real world.What has been much more challenging, however, is the incorporation of these insights into macroeconomic models.

Our paper therefore builds examples of dynamic stochastic general equilibrium models with money creation banks, and then contrasts their predictions with those of otherwise identical money creation models. Figure 1 shows the simplest possible case of a money creation model, where banks interact with a single representative household. More elaborate money creation model setups with multiple agents are possible, and one of them is studied in the paper.
...snip...

In the parts that I highlighted, they imply that the loanable funds assumption is false, and that it has been hard to get it out of the minds of many or most economists.
I assert that this is because this assumption was used (in the MS econ. theory being created with deductive logic and based only on assumptions) very early in the chain of reasoning. The key conclusion based on this assumption was that banks could be ignored for the rest of the theory. I've been told by 2 MMTers that MS econ. theory also removes money from the theory, which makes it be based on a purely barter system of economic exchanges.
. . . A analogy for this that most people can grok is Euclid's plane geometry. I want to show you the difference between an assumption being used early and one being used late.
1] So, the late case goes like this. Suppose that 2 parallel lines do meet if extended far enough, as they do on a sphere if we define 'parallel lines' in this way. [...snip... the way]
. . . This can easily be accommodated by creating "Solid Geometry". Where we are dealing with buildings we can still use Plane Geometry just fine. However, when surveying a state like Colorado, the grid of 1 sq. mile sections will not fit exactly because the surface is part of a sphere and is not a plane.

2] So, the early case goes like this. Suppose that there are no straight lines. That there are only curved lines and that their curve can change as you move along it [like they are drawn with a French Curve]. This may be actually true in General Relativity on grand scales.
. . . Now the entire structure of Euclid's proofs must be done over from scratch, because this was almost Euclid's very 1st starting point. For example, if we start with 3 points on the plane that will be used as the 3 corners of a triangle, and if we *can* use a straight rule to form the 3 sides, then Euclid's proofs will work.
. . . However, if we must use a French Curve to draw the 3 sides of the triangle, then the angles formed at the 3 corners will not total 180 deg. And worse, we really can't predict what they will be unless we can specify what part of the French Curve was used to draw each of the sides.

This analogy shows why it is hard to integrate the fact that banks create money with every loan into the MS econ. theory.

Got to go back in 1 hour. It is 9:40 pm in Chicago now. ***** I'm back now, and continue.

Lurkers, whenever you hear an economist or politician saying that Gov. deficit spending will increase interest rates for business investment and consumer spending loans, you will know that they are wrong because the "banks recycle the savers' money as loans for investment and consumer spending" assumption has been proven and accepted as being false; and without that assumption the proof of the theory that predicts interest rate increases has been proven invalid or just wrong. The theory goes on from "that banks loan savers' money" to also say that Gov. bond sales must come out of savers' money to complete the link between deficits and bank loans.
. . . Actually, the Gov. checks that result from the deficit spending have already been sent out and cashed, before the bond sales occur. Therefore, bond sales don't suck up money that was already in the economy on the day the checks were cashed. The bond sales suck up the money added to the economy (banking system) when the Gov. checks were cashed.
. . . So, actually, Gov. deficit spending (if anything) increases the supply of money in the economy.

BTW --- AFAIK, consumer spending loans are mostly done with credit cards. And, the credit card transaction deposits the money into a bank automatically. And AFAIK, these money is also created out of thin air.
. . . If I'm wrong, I'd be glad to see how and why.
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#15196117
Steve_American wrote:TtP, finally makes a post that is not riddled with false assertions.

It seems to be a lot easier to claim I make false assertions than to show that any of them are false. I guess that's why you do the former, but not the latter.
OK, TtP did say "any good accounting textbook", however there are 2 KEY words there, 'good' and 'accounting'.
When he specifies 'good' textbooks only, he can always say he was right, while giving the impression that almost all textbooks contin the info being discussed.

I meant that an accounting textbook would have to be good to describe banks' journal entries. Most do not.
Like TtP said might be true, in the US and Aust., etc., almost all econ. depts. are run by MS economists. They would not teach the correct facts in an accounting class as they teach the opposite facts in an introduction to macroeconomics class. It would make them look like the fools that they actually are.

I'm not sure about this. The economists may not care that their teachings are disproved in accounting classes.
Also, TtP reputation has been shredded in my opinion by his repeatedly confidently asserting things that are false.

Of which you have yet to identify even one.
So, why should I or we believe him when he asserts that he has taught economics classes?

I don't care if you believe me or not.
I did find this interesting paper on page 5 of my search on the subject written in 2015.

https://www.weforum.org/agenda/2015/06/ ... come-from/

That identifies the private bank money issuance fact, not the loanable funds "theory" (i.e., fabrication).
I've been told by 2 MMTers that MS econ. theory also removes money from the theory, which makes it be based on a purely barter system of economic exchanges.

Correct. Mainstream neoclassical economics ignores money, banking and debt.
This analogy shows why it is hard to integrate the fact that banks create money with every loan into the MS econ. theory.

I'm not sure that analogy is very apt, but whatever.
BTW --- AFAIK, consumer spending loans are mostly done with credit cards. And, the credit card transaction deposits the money into a bank automatically. And AFAIK, these money is also created out of thin air.

No; like bank loans, they are created out of the borrower's legal obligation to repay the loan, which is an asset of the credit card company that balances its liability to the vendor that submitted the credit card transaction record. Credit card companies that are not banks are in a different position, because they do not have the privilege of issuing money based on fractional reserves.
#15196119
Truth To Power wrote:No; like bank loans, they are created out of the borrower's legal obligation to repay the loan, which is an asset of the credit card company that balances its liability to the vendor that submitted the credit card transaction record. Credit card companies that are not banks are in a different position, because they do not have the privilege of issuing money based on fractional reserves.

Interestingly enough, nature seems to have similar accounting practices. Virtual particles are created out of nothing all the time, even in the hardest of vacuums; but they can only exist provided they eventually collide with their virtual anti-particle and are mutually annihilated back into nothing. Banks and credit card companies can create money out of nothing, so long as that money is annihilated in the end by being repaid by the borrower. Without the legal obligation to repay the loan, the money could never be created in the first place, just as a virtual particle owes its existence to the certainty that it will be annihilated.
#15196157
Truth To Power wrote:1] It seems to be a lot easier to claim I make false assertions than to show that any of them are false. I guess that's why you do the former, but not the latter.

2] I meant that an accounting textbook would have to be good to describe banks' journal entries. Most do not.

3] I'm not sure about this. The economists may not care that their teachings are disproved in accounting classes.

4] Of which you have yet to identify even one.

5] I don't care if you believe me or not.

6] That identifies the private bank money issuance fact, not the loanable funds "theory" (i.e., fabrication).

7] Correct. Mainstream neoclassical economics ignores money, banking and debt.

8] I'm not sure that analogy is very apt, but whatever.

9] No; like bank loans, they are created out of the borrower's legal obligation to repay the loan, which is an asset of the credit card company that balances its liability to the vendor that submitted the credit card transaction record. Credit card companies that are not banks are in a different position, because they do not have the privilege of issuing money based on fractional reserves.


1] Actually, I'm replying to benefit the Lurkers. I leave it up to them to decide if I have refuted any, some, many or all of your assertions that lack any evidence or good argument.

2] OK, fine. Now you have defined what you meant by "good' in the somewhat above reply.

3] So, you think that for 4 decades Profs. of MS econ. have been faced year after year with 1 or more students asking why their accounting Prof. teaches them a different way banks operate. And, that this has not become common knowledge among college students. I somewhat doubt that the is the situation.

4] I hope most of the Lurkers do think that I have identified many of your assertions that are wrong.

5] Of course you don't care what I think. That is totally obvious.

6] Actually the article I linked to did mention the loanable funds theory as being wrong and a problem for the nation and the world, because it leads to poor policies decided on by the Gov. and by banks and other institution in the nation.

7] At least we agree on something.

8] Maybe you didn't really grok the result in a person's mind of grasping the problem the MS econ. would have if it set out to correct that basic assumption in its theory.

9] Well, this answer is just symastics. The loan does create dollars out of thin air at the moment the 1st person deposits the check that she received from the borrower, and the check clears. At that moment those dollars become dollars certified by the US Fed. Res. bank as in some sense 'real' dollars. They are counted as part of the money supply. Therefore, those dollars are not seen as dollars by any one. Yes, they are assets of the bank, but so are the buildings the bank owns, are those real estate assets seen as "dollars". I doubt it.
. . . Dollars "in" the bookkeeping entries at the bank and "in" the contract making the borrower repay the loan are NOT deducted from any of the several ways the Gov. tracks the "money supply".
. . . After the Fed. has certified the dollars as 'real' dollars, they are spent back and forth in the economy for years, or maybe saved by someone.
. . . Also, it is legally possible that those dollars will never be paid back to the bank or to the eventual holder of the loan repayment contract. That is, the borrower can declare bankruptcy or die.

So, I'm asking the Lurkers to decide if banks create dollars out of thin air as I claim, or that your claim that somehow the loan contract means that the dollars of the loan are not created "out of thin air".
. . . TtP, in my mind, the Lurkers are the ones who decide who is right. Not you.

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#15196229
Steve_American wrote:3] So, you think that for 4 decades

More like 14.
Profs. of MS econ. have been faced year after year with 1 or more students asking why their accounting Prof. teaches them a different way banks operate. And, that this has not become common knowledge among college students. I somewhat doubt that the is the situation.

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.
8] Maybe you didn't really grok the result in a person's mind of grasping the problem the MS econ. would have if it set out to correct that basic assumption in its theory.

It's just one fatal flaw in MS econ, and not the worst one.
9] The loan does create dollars out of thin air at the moment the 1st person deposits the check that she received from the borrower, and the check clears.

How? The check clears, the reserves are transferred, a different bank has the liability, but how has the total liability increased?
At that moment those dollars become dollars certified by the US Fed. Res. bank as in some sense 'real' dollars.

No, they are certified the moment the lending bank writes the higher number in the borrower's demand deposit account.
They are counted as part of the money supply.

From when they are created as a liability balancing the new loan asset. Not just from when they are transferred.
Therefore, those dollars are not seen as dollars by any one.

That is so self-evidently wrong that I will just assume you don't know what it means.
Yes, they are assets of the bank, but so are the buildings the bank owns, are those real estate assets seen as "dollars". I doubt it.

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.
. . . Dollars "in" the bookkeeping entries at the bank and "in" the contract making the borrower repay the loan are NOT deducted from any of the several ways the Gov. tracks the "money supply".

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.
. . . After the Fed. has certified the dollars as 'real' dollars, they are spent back and forth in the economy for years, or maybe saved by someone.

The dollars are real from the moment they are created in the borrower's demand deposit account.
. . . Also, it is legally possible that those dollars will never be paid back to the bank or to the eventual holder of the loan repayment contract. That is, the borrower can declare bankruptcy or die.

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.
So, I'm asking the Lurkers to decide if banks create dollars out of thin air as I claim, or that your claim that somehow the loan contract means that the dollars of the loan are not created "out of thin air".

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.
. . . TtP, in my mind, the Lurkers are the ones who decide who is right. Not you.

The facts decide who is right. 100% of lurkers can be just as wrong as you.
#15196231
Potemkin wrote:Banks and credit card companies can create money out of nothing, so long as that money is annihilated in the end by being repaid by the borrower. Without the legal obligation to repay the loan, the money could never be created in the first place, just as a virtual particle owes its existence to the certainty that it will be annihilated.

So it's not creation of money ex nihilo. They need the balancing asset: the borrower's legal obligation to repay the loan.
#15196251
Truth To Power wrote:So it's not creation of money ex nihilo. They need the balancing asset: the borrower's legal obligation to repay the loan.

It is and it isn't. The money is created ex nihilo and it is then annihilated when the debt is repaid. It can only come into existence because it is guaranteed to be annihilated in the near future.
#15196326
SueDeNîmes wrote:So it is creation of money ex nihilio.

No, because the loan asset has to exist for the bank to create the money liability. No loan asset, no money creation.
Offset against the balancing asset: the borrower's legal obligation to repay the loan. Which cancel out like quanta.

If it was creation ex nihilo, the bank wouldn't need the loan in order to create the money.
If that were the only source of money and all debts were paid off, there would be no money.

Correct. Which is another reason private commercial banks should not be legally entitled to increase the money supply in order to provide themselves with interest income.
Or even negative money due to interest owing.

Negative money is impossible, like negative energy.
#15196327
Potemkin wrote:It is and it isn't. The money is created ex nihilo

I just explained why it is not ex nihilo, merely de novo. No loan, no money creation.
and it is then annihilated when the debt is repaid. It can only come into existence because it is guaranteed to be annihilated in the near future.

Yes, and that is why it is not ex nihilo. The money can't be created without the loan, but loans can certainly be created without creating money. That proves the conditions are not symmetrical, and the money is not ex nihilo.
#15196356
@Steve_American

regarding ur OP

** false particular in religions is their shift from Monotheism to polytheism, and that happened in India earlier, even tho after the Prophet Noah they also started from scratch, anyway the space in the spiritual realm for error from anthropological aspect is big so the search for Ultimate Truth can lead easily even to assumptions!

yet that is understandable ...

*** but economic theory of games applied to/for globalistic gambling coz geopolitics mids easily faked fiat system is not even close to understandable, specially knowing how huge is now the pool of literate masses altho who still believe in such system altho many from necessity or boredom, aside all the rest that are somehow enjoying in playing the game!

as MaxK repetitively saying Its All fiat Hoax Fox, recently had nice blob too ...

    ~

    for the rest of the hempty debate in the last posts I'll say its system that can be rigged in various ways if and when needed, examples many from clearing till derivatives, but one things stays norm the common people are screwed as blind broilers supporting the lie with their belief in the very same system of modern wage exploitation and slavery!

    regarding the last posts here nice explanation that can ease the bitching i.e. more costumers more debt more debt more money, its created from tin air! lets say its ultimate banksters skim for plutocratic ownership of the euroatlantic assets since enlightenment time til now normally perfected and upgraded till marrow bone yeah many people have issue with lymphocytes coz shit balance! * check step no.3 of the last linked video he says its not monsterema in question but witchcraft, tho the debt can and by rule (as pointed in the tin air link video above) is normal beast that roars to all of us if we know that without loans and debt this cashatalistic game cant roll, hek where and who is tarsan :)
Last edited by Odiseizam on 30 Oct 2021 03:02, edited 1 time in total.
#15196360
@Odiseizam,
Your ramblings are very hard to understand.

You and I just disagree on the history of religious developments. I studied Anthropology and accept its conclusions. You seem to have studied the Bible and accept its assertions and the conclusions that follow from that one acception of all its assertions.

And I discount all youtube economic 'expert' predictors who are not into MMT. Their minds are distorted by the totally false economic theory that uses logic in a totally wrong way to deceive the people.

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