SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: mishedlo who wrote (49231)1/9/2006 4:15:56 PM
From: Tommaso  Read Replies (1) of 110194
 
My copy of Paul Samuelson's book "Economics" includes on page 298 a table of reserve requirements for Federal Reserve Banks in May, 1975:

For demand deposits:

First $2 millon: 7.5%

$2-$10 million: 10%

$10-$100 milllion: 12%

$100-$400 million: 13%

Over $400 million: 16.5%

Time Deposits

under $5 million: 3%

Over $5 million 30-179 days: 6%

Over 180 days: 3%

Mr. Shostak either does not know or chooses not to take notice of the fact that it is perfectly legal for a bank to have a billion dollars in demand deposits and only have 150 million dollars in actual cash. Yes, I know that the real situation is more complex than this, but Mr. Shostak cannot seem to grasp even an oversimplified description, that no student can pass Economics 101 without grasping. Any good economics textbook will explain the way in which the interbank transactions, using excess reserves for loans or to buy bonds, mutltiplies the effect of any addition of actual cash (or Federal Reserve credits) and expands the money supply.

Perhaps Shostak is just pretending that all bankers are frauds and criminals because they do things differently from what he thinks they ought to be doing.

It does make you wonder if he would say that the earth is flat. After all, if the earth were curved into a ball, you would always be going uphill or downhill, wouldn't you?

Well, it is hard to argue with people who refuse to deal in realities. I used to argue about inflation with a (now former) brother-in-law, a highly-qualified lawyer. He was sure that all inflation could be explained by energy prices. At one point he finally did say to me, "Are you trying to tell me that there is more paper money in existence than there was ten years ago?" As if that were a perfectly ridiculous thing to say! He had never taken a look at any monetary statistics, not even the figures for actual currency in circulation. I did not ask if he thought we were still on a gold standard, but he probably did.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News