Stupid World

[bogan]

Where did the person get the 100 from in the first place? Most probable answer is that the money was plucked out of thin air by the bank because the person turned up with a lump of gold or a cow or a shiny dog turd or sommink else that has some form of perceived value. Either way, the money is plucked out of thin air.

Transaction 1: the bank still has 100. 20 in reserve and a 80 asset.
Transaction 2: the bank still has 80. 16 in reserve and a 64 asset.
etc...

Banks have lent out, but are still owed. By the end of round 1 the banks have 457.05 of deposits. That those deposits belong to someone else is irrelevant, because if it were relevant, then how can you lend the initial 100 deposit which you say wasn't the banks to begin with? At that very same point in time they also hold the 100 reserve. All money created is plucked out of thin air.

That is a valid opinion, but it is not plucked out of thin air by the bank.

Transaction 1 bank gets 100, pus 20 in reserve and lends the 80 out, leaving the bank 20 in reserve, 100 in debt, and 80 in loan asset; 0 sum.
Transaction 2 bank gets 80, puts 16 in reserve with the 20 and lends 64 out, leaving the bank 36 in reserve, 180 in debt, and 144 in asset; again this is 0 sum, as is every step down the chain.
The end of all rounds (as decreed by the reserve requirement) is 500 in deposits, 400 in loans, and 100 in reserve; still 0 sum.

The bank cannot lend out that 100 in reserve or a portion of it as the reserve requirement ties it to the 400 already loaned out. Perhaps you are thinking of the banks reserve as cash in drawer it can do what it likes with? That is not the case, it can only put that cash back into circulation when the loan it is tied to is paid up. Ie, after first deposit bank has 100, it lends 40 out which leaves the bank with 50 cash on hand, and 10 in the reserve.
The initial 100 deposit is a loan service contract from an individual to the banks; in return for the bank holding the money securely and paying out a small amount of interest the bank gets to use the money itself to lend to another person. At that point in time (before first loan) they do hold that deposited money in reserve, and could pay it straight back if the depositor wanted to make that withdrawal. Nowhere in that process has the bank generated money out of thin air.

[Oscar]

That is a valid opinion, but it is not plucked out of thin air by the bank.

Transaction 1 bank gets 100, pus 20 in reserve and lends the 80 out, leaving the bank 20 in reserve, 100 in debt, and 80 in loan asset; 0 sum.
Transaction 2 bank gets 80, puts 16 in reserve with the 20 and lends 64 out, leaving the bank 36 in reserve, 180 in debt, and 144 in asset; again this is 0 sum, as is every step down the chain.
The end of all rounds (as decreed by the reserve requirement) is 500 in deposits, 400 in loans, and 100 in reserve; still 0 sum.

The bank cannot lend out that 100 in reserve or a portion of it as the reserve requirement ties it to the 400 already loaned out. Perhaps you are thinking of the banks reserve as cash in drawer it can do what it likes with? That is not the case, it can only put that cash back into circulation when the loan it is tied to is paid up. Ie, after first deposit bank has 100, it lends 40 out which leaves the bank with 50 cash on hand, and 10 in the reserve.
The initial 100 deposit is a loan service contract from an individual to the banks; in return for the bank holding the money securely and paying out a small amount of interest the bank gets to use the money itself to lend to another person. At that point in time (before first loan) they do hold that deposited money in reserve, and could pay it straight back if the depositor wanted to make that withdrawal. Nowhere in that process has the bank generated money out of thin air.

You must spread some Reputation around before....I don't know why you bother arguing with these idiots.

[bogan]

You must spread some Reputation around before....I don't know why you bother arguing with these idiots.

Arguing? I'm just trying to see if they can be educated. I reckon they all have intelligence but I'm not sure if they have the ability or open mindedness to apply it where banks/money/'the man' are concerned.

As an FYI to them, that was an honest evaluation, not an ad-hominem so lets not start down that road again...

[unstuck]

I don't know why you bother arguing with these idiots.

Maybe the same reason YOU like to argue with them.

[mashman]

That is a valid opinion, but it is not plucked out of thin air by the bank.

Transaction 1 bank gets 100, pus 20 in reserve and lends the 80 out, leaving the bank 20 in reserve, 100 in debt, and 80 in loan asset; 0 sum.
Transaction 2 bank gets 80, puts 16 in reserve with the 20 and lends 64 out, leaving the bank 36 in reserve, 180 in debt, and 144 in asset; again this is 0 sum, as is every step down the chain.
The end of all rounds (as decreed by the reserve requirement) is 500 in deposits, 400 in loans, and 100 in reserve; still 0 sum.

The bank cannot lend out that 100 in reserve or a portion of it as the reserve requirement ties it to the 400 already loaned out. Perhaps you are thinking of the banks reserve as cash in drawer it can do what it likes with? That is not the case, it can only put that cash back into circulation when the loan it is tied to is paid up. Ie, after first deposit bank has 100, it lends 40 out which leaves the bank with 50 cash on hand, and 10 in the reserve.
The initial 100 deposit is a loan service contract from an individual to the banks; in return for the bank holding the money securely and paying out a small amount of interest the bank gets to use the money itself to lend to another person. At that point in time (before first loan) they do hold that deposited money in reserve, and could pay it straight back if the depositor wanted to make that withdrawal. Nowhere in that process has the bank generated money out of thin air.

I didn't say that the reserve could be lent out. I see why you would infer that, fair enough, but I haven't stated such.
Where did the individual get the 100 from? You're turning 100 into 500, that requires the creation of money out of thin air... unless of course you believe this guy to be a liar (first one of many that I came to).

[Brian d marge]

So is every major economist is an idiot then

[unstuck]

So is every major economist is an idiot then

Yes.

[yokel]

I didn't say that the reserve could be lent out. I see why you would infer that, fair enough, but I haven't stated such.
Where did the individual get the 100 from? You're turning 100 into 500, that requires the creation of money out of thin air... unless of course you believe this guy to be a liar (first one of many that I came to).

Money has an agreed value that is why the government is printed on bank notes so when there is issues they will sort you out.
While it appears that the banks create money out of nothing or out of thin air, there is actually something in that thin air.

the banking system is not the problem, it's actually the absolute best way to handle time and resources between people or entities.
the issue is that it is controlled by psychopathic warmongering mother fuckers and if you dream up some other way of handling transactions you can be rest assured the psychopaths will takeover and control your new money system.

[mashman]

So is every major economist is an idiot then

They're bound by the rules that they've been brought up and educate with and know no better... just like every other sheeple. It's the idiots, like the fella below, that give the system credence that condemn economists as looking like idiots. Some of us know better irrespective of what we've said in the past .

Yes.

[unstuck]

They're bound by the rules that they've been brought up and educate with and know no better... just like every other sheeple. It's the idiots, like the fella below, that give the system credence that condemn economists as looking like idiots. Some of us know better irrespective of what we've said in the past .

Educated, fool.

[bogan]

I didn't say that the reserve could be lent out. I see why you would infer that, fair enough, but I haven't stated such.
Where did the individual get the 100 from? You're turning 100 into 500, that requires the creation of money out of thin air... unless of course you believe this guy to be a liar (first one of many that I came to).

Excellent, so tell me exactly what can be lent out at the end of that $500 cycle to multiply it again? The 500 can't because the bank doesn't have that, the 400 is already lent out so that can't either, and the 100 is reserve so that can't be touched.

He might be right in a sense with how they move money around and charge interest and all other subtle techniques, but if he is talking about it in this context FRB then he is wrong.

So is every major economist is an idiot then

Perhaps not every one of them... You can't fall back on 'this is what economists say though' as a counterpoint to such a simple and numerical explanation as I provided, because what people say can be taken out of context or wrong; the numbers however, don't lie, and show us the true story. FRB does not create money out of thin air, find me a major economist who says it does and I'll either find a misinterpretation or an idiot.

[mashman]

Money has an agreed value that is why the government is printed on bank notes so when there is issues they will sort you out.
While it appears that the banks create money out of nothing or out of thin air, there is actually something in that thin air.

the banking system is not the problem, it's actually the absolute best way to handle time and resources between people or entities.
the issue is that it is controlled by psychopathic warmongering mother fuckers and if you dream up some other way of handling transactions you can be rest assured the psychopaths will takeover and control your new money system.

lol, my eyes, my eyes.

[mashman]

Educated, fool.

heh, touchme.

[mashman]

Excellent, so tell me exactly what can be lent out at the end of that $500 cycle to multiply it again? The 500 can't because the bank doesn't have that, the 400 is already lent out so that can't either, and the 100 is reserve so that can't be touched.

He might be right in a sense with how they move money around and charge interest and all other subtle techniques, but if he is talking about it in this context FRB then he is wrong.

It's a never ending cycle. The bank does have it, because they hold the deposits.

So FRB doesn't move money around, even though it's turned 100 into 500? @techniques... in other words, they make their own rules up in order to keep people from noticing that they're simply printing money.

[bogan]

It's a never ending cycle. The bank does have it, because they hold the deposits.

So FRB doesn't move money around, even though it's turned 100 into 500? @techniques... in other words, they make their own rules up in order to keep people from noticing that they're simply printing money.

They don't hold the deposits, they have lend the deposits out. Transaction 2 is able to put in 80 because 80 was lent out to them from transaction 1. Or are you thinking the subsequent transactions are from new people?

Let's just focus on showing how that 100 gets turned into 500, cos it still looks like 100 to me.