I think it's funny how some people state that the fed creates money (which it does), then says banks do not create money. Where does the created money get injected into the economy?

New money has to be created every year to account for inflation. How is it put into circulation? Do they just print more money and hand it out?

What's even more funny is how people state that Banks have the money loaned out in their possession. So in a town of 1000 people, with 600 mortgages at the local bank, averaging 150k each, that means the bank has 90,000,000 in it's possession, or 90,000 per person in the town.

Oh! Associating me with Obama eh? I'll let that garbage slip this time!

In any case, here's a little something that will help you out! Yes, it's a video but I lack the ability to explain it to you in simple and understandable terms!

YouTube - Money as Debt 1 of 5

YouTube - Money As Debt (2 of 5)

YouTube - Money As Debt (3 of 5)

YouTube - Money As Debt (4 of 5)

YouTube - Money As Debt (5 of 5)

Enjoy!

So you're contradicting yourself now! Thanks

Banks can foreclose on homes, and sell them to recoup their loans in good times.
If you have a a good real estate market, and a guy isn't paying his mortgage you can take his house and sell it.
But if 10% of the homes in a town are behind, you can't foreclose on all of them, because the bank can only bid on the property for a year, after that it goes no reserve, and if you are auctioning off 10% of the homes in a town, they are going to go for very short money, and at that point, the bank takes a considerable loss.
Better for the bank to just let the people stay there, keep the price of real estate from collapsing completely and have an asset on their books.

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“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

Well that's comforting to know. How long was Japan's economy in the shitter when they tried that nonsense?

A friend bought a house in Miramar, FL a couple weeks ago that sold in 2006 for $325,000 for $50,000. Banks would rather not take that loss, but I guess something is better than nothing when they need to boost your reserves.

dood, seriously, you're just making yourself look silly...

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Socialism doesn't create a rising tide that lifts all boats. It drains the lake and teaches the boat riders not to help themselves by rowing.

Jesus loves you, allah wants you dead

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."

Ayn Rand

I've looked at foreclosed properties and they do jack shit to keep people in the homes or make them salable following foreclosure. People don't like to buy a foreclosed property with tenants sitting in it. Banks don't like paying property taxes on properties that have inflated values either.

The Fed is not the banks, it's THE bank. Please educate yourself before you respond to any more of my posts. It's like talking to a third grader.

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Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

Yep. There seem to be some real bargains out there. Haven't seen any, however, in my neck of the woods. I keep looking, though. We didn't have the bubble other areas had, but out local economy still sucks.

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Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

You are the one who needs to educate himself.

You are so ignorant you don't even know that banks create money.

Here's some reading, if you are interested in actually breaking out of your ignorance.......

How Banks Create Money Out of Nothing - Fractional Reserve Lending and Banking Federal Reserve monetary economics inflationary | Midwest Free Press

From the Dallas FED......

It may not seem to make much sense, but banks actually “create” money when they lend it. How do they do it? They
take a portion of the money that has been deposited in the bank and make a loan to an individual or business.
When that individual or business uses the loan to make a purchase, the seller deposits the money in a bank,
which then lends a portion to another individual or business. The process goes on and on,
providing a continuing source of funds to keep the economy moving forward.


Money, Banking & Monetary Policy - Everyday Economics - FRB Dallas

How can you not know this?

You are telling someone else to educate themselves, yet you don't even know how banks create money?

Jeesh. Get a flipping clue.

Your ignorance is only exceeded by your arrogance. Other than that, you pretty much nailed me.

From the Court Decision:
Defendant appeared and answered that the Plaintiff created the money and credit upon its own books by bookkeeping entry as the consideration for the Note and Mortgage of May 8, 1964 and alleged failure of the consideration for the Mortgage Deed and alleged that the Sheriff's sale passed no title to plaintiff. http://www.abidemiracles.com/images/...ome%20Daly.htm

For your enjoyment:
http://www.lawlibrary.state.mn.us/newsletter/0711.html



Now that you've lectured me on the circulation of money, perhaps you care to explain how your support of more taxes helps that circulation?

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Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

For those still confused, and hey I don't blame you as I'm not a teacher and make no pretense of being one, and the gold bugs don't have a clear idea of how things work, but the following link explains how the Fed creates money:

How the Fed Creates*Money - Brief Analysis #611

Please note, banks aren't allowed to "create" money, only the Fed can, and does so even when the economy is clicking along nicely. They do it because every Fed chief since Hoover has been more afraid of deflation than inflation (as long as inflation is "controlled").

Not mentioned in the article is the power of the Fed to "create" money by controlling the leverage rate (or margin rate) stock brokers are allowed to offer their customers. This is a power the Fed rarely exercises for good reason, they've got enough on their plate without screwing with the stock market.

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Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

Banks do create money........

Here’s a quote from Barack Obama, President of the USA, on April 14th of 2009:

“Although there are a lot of Americans who understandably think that government money would be better spent going directly to families and businesses instead of banks – ‘where’s our bailout?,’ they ask – the truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth.”

How Do High-Street Banks Create Money? | Ben Dyson

Now, how does "a dollar of capital in a bank result in 8-10 dollars in loans" if banks don't create money?

Reserves are collateral which the bank can then use to borrow against with either the Fed or fellow banks with a 10 to one leverage ratio.

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Giving money and power to government is like giving whiskey and car keys to teenage boys. ---P. J. O'Rourke

considering what I've red in your posts........