Heidi wrote:Since our Congress saw fit to legalize the creation of money out of nothing in 1913 (but ONLY by the Federal Reserve... the rest of us would be criminals for doing exactly the same thing), it became possible for our Justice system to allow and approve legalized counterfeiting by the Federal Reserve.
Since there is nothing in the aforementioned legislation even remotely resembling your screed, just more inane rant. The Fed issues nothing unless it is based on assets at hand or upon government securities sold.
And knowing, as I do, that prevailing in court is a matter of superior STRATEGY rather than of honor, or of truth, none of the above surprises me.
Rather a matter of law and fact-which you do not like, but law and fact none the less.
What still surprises me is your callous disregard for truth. But I think I'm getting used to it.
Unlike your callous disregard for reality?
Remember... a Bank President testified under oath... that his bank... in cooperation with the Federal Reserve Bank of Minn... created new money via a bookkeeping entry when it made loans.
Sure he did, just like a JP had the authority to do what Mahoney did, which he didn’t. JP courts in MN barely had enough authority to blow their noses without permission from the upper courts. No authority for jury trials, no authority to prevent an appeal from one of his decisions being heard, and no authority to refuse legal tender. As also no authority to disregard an order from a superior court.
That testimony was never contradicted by cross-examination, or by appeal.
Most likely because it was fabricated by Daley. Since the bank did challenge the decision to a superior court they obviously weren’t going along with the nonsense.
All that this 'nullification' boils down to is the use of superior power and strategy by those who wanted to squelch, bury, and 'nullify' (in the figurative sense) this Bank President's testimony and the jury verdict which resulted.
The nullification amounts to a dog pound judge making rulings he had no authority to make and even less grounds to make, and the superior court pointing it out to him. No strategy, just the plain and simple law as it existed in MN at the time.
It is different from what a Credit Union does because, as the CU Assn itself states, a CU lends out a portion of it's members/depositors' funds to other members. Its lending practices are conservative, as well... considering the fact that their depositors' actual savings are at risk.
Which is exactly what a bank does in the ordinary course of business, they put their depositor’s deposits and their shareholder’s equity at risk by making loans.
Perhaps they find that unnecessary... considering the fact that most people (especially people who've watched "It's A Wonderful Life" -- which is probably most of us) ALREADY comprehend the fact that a run on the CU would be destructive, and that maintaining faith and trust in the CU to make more wise loans than foolish loans, we WILL receive interest as a result of trusting a portion of our deposits to the CU to be lend out for loan funds.
No more so than it would be to any financial institution.
No it does not, because in the (hopefully unlikely) event that every depositor decided to withdraw 100% of their deposits ALL AT THE SAME TIME (a so-called "run on the bank"), there would be insufficient funds to return to the depositors.
And why or how is this different than with any financial institution?
Don't blame me for the fact that you either FAIL or REFUSE to comprehend the difference between lending out a percentage of depositors' actual deposits (the way a CU does) and "Multiple Deposit Creation" via fractional reserve lending.
Don’t blame me if you can’t read a simple chart, what you refuse to grasp, is that it is the same $9,000 dollars being recycled through banking transactions. In each of those transactions there is a matching debit and credit offset.
The original bank only loaned $9,000 and then kept $1,000 in reserve, it did not "create" $90,000 dollars and then put it in its pocket. It is at risk for the full $9,000 it loaned.
In the normal course of business, it will get back the $9,000 and the interest it charged on the loan, say 10% for convenience-$900, which means in the end it will get $9,900 for the risk of making the loan in the first place. $9,000 will go back in to cash on hand, and $900 will go into interest income or whatever they call it as profit, which will go towards paying shareholders, staff, and expenses.
While the money supply is temporarily increased because the $9,000 isn’t sitting in a vault somewhere, it is also eventually decreased when it goes back into a bank as a deposit or repayment.
The best comparison I can make is a library that loans out books, and since they don’t have a reserve requirement, so they can lend out all the books they want, or they can lend out the same book a hundred times. When the auditors come through, they want to know three things, how many books did you start with, how many did you lend out, and how many do you have left. They started with 10,000 books, they lent them out to the public. Rental count shows that they rented 100,000 books over the course of the year. They had 9,995 books at the end of the year as five of their borrowers “defaulted” and didn’t return their books. So tell me then where are the other 90,000 books the library is supposed to have, since they rented 100,000 over the course of the year? You can’t of course, since there is a difference between inventory count, and rental count.
You must be descending into madness... you're talking to yourself now...
I am admittedly talking to a doorpost, but then you’re an easy target.
As demonstrated in that Fed Res chart:
Fractional reserve lending is the process of using an initial deposit (the so-called 'reserve') as the BASIS for loaning 90% of that deposit out in NEWLY CREATED funds. Once those NEW funds are deposited someplace else, those deposits then become the basis for loaning out 90% of THAT amount, and so on until NINE TIMES as much 'money' as existed in that first deposit has been created. The entire amount of the initial reserve deposit REMAINS on deposit.
Oh, so very very wrong. The reserve is, and always has been the portion of deposits and assets kept on hand by institution to handle day to day business. Again, they have created nothing, they are loaning 9/10ths of what they have on hand, if they were creating anything they would have assets of 190% from where they started, doesn’t, never did work that way. And again, nothing has been created, they have loaned out part of what they had on hand, and now they don’t have it on hand.
NONE of it has been removed from that account and lent out. NEW money has been created during the lending process... thus causing an INCREASE in the money supply and what we call 'inflation'.
Your math continues to fail you. The cash on hand acct has been depleted by the amount of the loan, and it is no longer in the bank, and liabilities have increased by the amount of the loan. The money supply has increased, temporarily by the amount of the loan, but that is hardly inflation.
If you were REALLY sharp, you'd notice that the initial deposit used as the "reserve" is nothing but another debt instrument -- securities purchased by the Fed: "Federal Reserve purchases $10,000 in U.S. Government Securities..."
If you were really sharp, or literate, you would have seen that the initial deposit was $10,000 in cash that the depositor got from SELLING a T-bill and that he deposited the CASH in the bank. But then you don’t understand the chart either, so why should I be surprised.
Sez you... talking to yourself, again, LOL.
Speaking of getting the numbers right... did you bother to tally up the right-hand column of that Fed Res chart by any chance? If so... did you notice the INCREASE in deposits? Did you bother to look at the totals at the bottom of the columns?
Yes, it is summing up deposits. I can do the same trick by taking $100 and depositing it in my bank and then withdrawing it and then redepositing it until my monthly deposit total reaches any amount I want, but I would still only have $100 by the time I got done, same thing here, you just refuse to see it. Those deposits do not reflect matching withdrawals and repayments that eventually cancel the whole run out.
That process would be the OPPOSITE of lending OUT a percentage of actual pre-existing deposits. Lending out pre-existing deposits puts actual pre-existing capital at RISK instead of creating NEW money based upon some 'reserve' capital which still remains INTACT.
Gee, almost got it right finally, since the lending out of deposits is what banking is all about, but then you go off in the weeds again to fantasize.
ONLY the Federal Reserve Banking system is legally permitted to do that.
Two entirely different animals, but then you are as confused about that as you are about everything else.
Baloney -- either pure ignorance or deliberate obfuscation.
As Rothbard so eloquently describes, banking changed drastically when fiat currency became law, and fractional reserve lending began.
More nonsense, since banks have always operated on fractional reserve, that is why it is called banking, and I hate to break it to you, but they were doing it long before either the Fed or the US were a gleam in anyone’s eye.
I hope that our readers will investigate this quandary themselves, and make up their own minds based upon the information that is still available.
Read "What Has Government Done to Our Money", and "The Case Against the Fed" by Murray N. Rothbard. Then listen to Dr. Edwin Vieira, Jr., Phd (available on youtube). After that, you might find Ron Paul making sense to you when he talks about our economic crisis. He predicted it rather accurately, btw:
Why should anyone waste their time on an economist no one takes seriously, a lawyer who is just this side of being hospitalized for evaluation, and pandering gynecologist masquerading as a politician who is such a joke that he has never managed to get so much as one bill out of committee or considered as anything but a colossal embarrassment by his colleague’s. Oh right, they agree with your particularly warped view of reality, don’t think so. There’s a great deal better fiction out than what you and that collection are peddling.