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To: Elroy Jetson who wrote (108632)	11/27/2014 11:43:02 PM
From: bruiser98	Read Replies (2) \| Respond to of 219952

>>>When money is created through new debt to buy a home, fund a business or any other reason, this increases the amount of the money supply for the duration of the loan. When new loans are made, this increases the amount of money available - which in turn drives interest rates down.<<< But banks don't lend out deposits, reserves, or excess reserves. The banks create new credit money with every loan. The bank just types in the loan amount into the borrower's account. I wonder what keeps the banks from typing in figures into the BUY TREASURIES account or the BUY STOCKS account or the PAY FINES account or the FUND HILLARY"S CAMPAIGN account.

To: Elroy Jetson who wrote (108632)	11/28/2014 2:39:00 AM
From: Haim R. Branisteanu	Respond to of 219952

A good example of your theory is Japan with 200% to GDP but with all if not most debt in Yen and owned by the local population. As long as the same country population transfers their saving to others in form of loans, the savings and loan are something undefined and in theory can grow as long as the savings equal the loans - but there is a catch and was perfectly explained in the "The Emperor's New Clothes" by Hans Christian Andersen

To: Elroy Jetson who wrote (108632)	11/29/2014 12:49:20 PM
From: bart13	Respond to of 219952

You have to separate the effects of debt from what a central bank or treasury does. I think that's unwise to the extreme. They're intimately related. As an example, hyperinflation and currency collapse is a result of owing debts which are not denominated in your own currency. Within your own economy you can owe nearly infinite amounts of money, denominated in your own currency, and be fine. I don't believe that history shows that it works, and even more so in a more globalized world. There is one very unique quirk with banking . . . We're all familiar with the concept of supply and demand. If the demand for money goes up interest rates, which are the price of renting money, should go up. *This is not the case with a banking system.* Which is very much one of the many things I have against the current structure of banking and Central Banks. I believe that the US will pay an even higher price in the future for ZIRP, etc. than we already have.