Re: General Theory Seminar--Moore

["John O'Donnell" <jackodonnell@xxxxxxxx>]

Basil Moore wrote:
>
> John
> Sorry if i have confused you. You misunderstand my intent.

And you misread my comments.

> 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.

Banks do not create "money" except by a very misleading
definition of money.

They only intermediate the creation of credit. Credit can be
created by anyone at any time without license from government
and without the availability of money. The only distinction
between individually created credit and bank created credit is
the transferability and redemption conditions of the credits.

Neither private nor bank credit is money in the sense of being
the stuff used to pay taxes and settle court enforced
obligations.

> >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.
> >.
> >

--
			-- jbod

		Tax Privilege, Not People
___________________________________________________
Come visit and see a new economic perspective --
       http://www.geocities.com/CapitolHill/1067
           Comments/arguments welcome.
.