Federal reserve debunkers I need alittle help

[Max Photon]

Synthetic currency is borrowed into existence

Then you should revise the reference that made you reach such a silly conclusion. Banks do not "create money out of thin air" to "loan it out".

“This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash, or credit. If the banks create ample synthetic money, we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defect remedied very soon.”

Robert H. Hemphill
Credit Manager of the Federal Reserve Bank of Atlanta Georgia



Gentle readers, AlanGreenspan's posts are worthless.


Max

 

[Dr Adequate]

The Fed is unconstitutional because of section 8 ...

I notice that the Air Force is also unconstitutional by virtue of the same section.

 

[Dr Adequate]

The USA deserves to be destroyed out of existence ...

He's tough, but he's fair.

 

[MisterBigg]

Then you should revise the reference that made you reach such a silly conclusion. Banks do not "create money out of thin air" to "loan it out". The money they lend to their clients comes from their reserves or loans from the Central Bank ... how come you claim they "create money out of thin air" and then explicitly say they do this "based on reserves" ? You should have seen the contradiction right there. When the client pays the loan the "newly create money" is not destroyed ... where did you get this idea from?

I got this "idea" from the Federal Reserve Board of Chicago's publication describing the process:

//landru dot myhome dot net/monques/mmm2.html#MODERN

(can someone please repost this as a proper URL)

I can't possibly imagine how the fact that banks create money can be more clear, considering the text of the Federal Reserve Act and the very own words of the Federal Reserve Board of Chicago:

"Changes in the quantity of money may originate with actions of the Federal Reserve System (the central bank), depository institutions (principally commercial banks), or the public. The major control, however, rests with the central bank. The actual process of money creation takes place primarily in banks."

Now that we got that out of the way, does anyone still think that private banks don't create money out of nothing, loan it out, and receive interest payments from the created money?

 

[AlanGreenspan]

The publication you cited does not state that money is created "out of thin air" (as you previously claimed) nor "out of nothing" as you are claiming now. It also says nothing about your claim that when a loan is paid off to a bank the "newly created money" is destroyed. Is poor reading comprehension a prerequisite for regurgitating the ignorance found at conspiracy theory sites and "documentaries" ?

No wonder why you did not address the rest of my post.

 

[MisterBigg]

The publication you cited does not state that money is created "out of thin air" (as you previously claimed) nor "out of nothing" as you are claiming now.

"Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000. Reserves are unchanged by the loan transactions. But the deposit credits constitute new additions to the total deposits of the banking system."

It also says nothing about your claim that when a loan is paid off to a bank the "newly created money" is destroyed.

"As in the case of deposit expansion, contraction of bank deposits may take place as a result of either sales of securities or reductions of loans. While some adjustments of both kinds undoubtedly would be made, the initial impact probably would be reflected in sales of government securities. Most types of outstanding loans cannot be called for payment prior to their due dates. But the bank may cease to make new loans or refuse to renew outstanding ones to replace those currently maturing. Thus, deposits built up by borrowers for the purpose of loan retirement would be extinguished as loans were repaid."

Gentle readers, AlanGreenspan's posts are worthless.

While his insulting style certainly blemishes his argument he is certainly entitled to his opinion, even when it obviously wrong in the face of evidence.

 

[AlanGreenspan]

Again, the publication does not state that money is being created "out of thin air" as you claimed. The process described in said publication is very different from being "out of thin air". The first excerpt you quoted is what I explained in the simple example I gave you earlier, and as I said then: no money is being created "out of thin air".

"As in the case of deposit expansion, contraction of bank deposits may take place as a result of either sales of securities or reductions of loans. While some adjustments of both kinds undoubtedly would be made, the initial impact probably would be reflected in sales of government securities. Most types of outstanding loans cannot be called for payment prior to their due dates. But the bank may cease to make new loans or refuse to renew outstanding ones to replace those currently maturing. Thus, deposits built up by borrowers for the purpose of loan retirement would be extinguished as loans were repaid."

Do you even understand what is being said there? Seems like you are using this excerpt to demonstrate your claim that when a bank loan is paid off the "newly created money" is destroyed. When in fact this excerpt (and the whole section where you took it from) is detailing the process of a contractionary monetary policy. Again, that's very different from what you are claiming here.

While his insulting style certainly blemishes his argument he is certainly entitled to his opinion, even when it obviously wrong in the face of evidence.

The only one stating an opinion here, right now, is you. The fact that you are making references to a document you obviously don't understand does not give any validity to your opinion ... in fact, the publication states the exact opposite of your claims.

Let's do this, first you try to understand what you intend to quote and only then you proceed to quote it. How about that?

 

[AlanGreenspan]

You can't even argue that banks are risking anything because they get bailed out by the government if anything goes wrong.

Can you name a single example of this?