Re: General Theory Seminar--Moore

[Basil Moore <bmoore@xxxxxxxxxxxxxxxxx>]

John
Sorry if i have confused you. You misunderstand my intent.
I was merely making the point that, if people were unwilling to lend their
(fiat)money (cash) to the banks, but instead presented all deposits
immediately on receipt to the banks for fiat money (cash), the banks would
then no longer be able to create money. True they could lend out the money
of their shareholders, but that is not money creation.

Remember, banks, although they create money(deposits), are also financial
intermediaries.
Basil Moore
At 08:44 PM 12/15/99 -0800, you wrote:
>William F. Hummel wrote:
>>
>> Basil Moore wrote:
><<SNIP>>
>> >If people were not willing to loan cash to the banks in exchange for
>> >deposits, banks would not be able to create money.
>>
>> How can this be true?  A bank does not even need deposits to make
>> a loan.  It only needs enough capital of its own plus a license
>> from the appropriate authority (state of federal).  In other
>> words, bank create (credit) money, they do not lend depositor's
>> money.
>
>First, bank "capital" is money; second, the assertion that all
>that is needed to create credit (not "money") is a license from
>government is false; third the assertion that banks do not lend
>depositor's money is also false. Other than that, you've pretty
>well got it.
>
>--
>			-- jbod
>
>		Tax Privilege, Not People
>___________________________________________________
>Come visit and see a new economic perspective --
>       http://www.geocities.com/CapitolHill/1067
>           Comments/arguments welcome.
>.
>