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Napanee, Ontario | did you read this part of my post?
"As for the banks printing money... they have a charter, which allows to them to borrow it from the FED at the overnight right, which is presently zero percent, as you may or may not know. And guess how the FED comes up with it??"
As for this statement:
"If the bank is short on loans from individuals and businesses (deposits) they may also borrow money from the fed to lend out, but only a certain amount as this is regulated."
Last i remember, you couldn't borrow money from the FED at 0% for the last 100 years, so no, it's not the same bsuiness model as it's always been, but thats beside the point. So when you borrow the money from the FED, how does the FED get the money?
I am an accountant and Equity valuator by training, so i understand you explanation of what a banks liabilities and assets are. Again you need to read my post more clearly like i said to the other poster. To this point:
"The money does not come from thin air, it comes from other entities in the form of paychecks, cattle checks, grain checks, etc. and is taken from the payor on the checks account and put into the bank's account at the fed."
I never said the deposit comes out of thin air. I specifically said the customer provides the deposit, and the bank provides the fractional lending against it, which in essence, is borrowed from the FED at the ultimate destination (since borrowing interbank eventaully leads to the FED on an overnight loan). And since the FED creates the money out of thin air, which I still havn't seen disputed here yet, then the fractionl portion of the loan is, in esseence, provided out of thin air.
Here, lets make this simple and look at a standard house mortgage transaction. When the customer puts his 5% down or 10% down, as the case may be.... where does the bank source the balance of the funds (ie the mortgage balance), to disburse to the title holder and/or prior mtg holder?
Edited by OldMcdonald 7/30/2014 09:43
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Bankers and cattle prices
