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06-12-2020 01:54
Spongy Iris
★★★☆☆
(457)
IBdaMann wrote:
gfm7175 wrote: The balance sheet is a financial statement (IOW, a "report"), not a journal or a ledger. There aren't any "entries".

Good catch. I missed this. Of course the ledger is used to capture the transactions. The balance sheet is just a current state, or a "snapshot." I should have caught that.

gfm7175 wrote: ... although I am much more familiar and practiced with the 'accounts receivable' aspect of accounting than I am with other aspects, ...

You work in "Billing."

gfm7175 wrote: I've received it...

That's a credit.

gfm7175 wrote: I've deposited it...

That's also a credit.

You've got to give me credit.


.


A good job fit for GFM.

Pestering people with annoying messages
06-12-2020 03:01
Into the NightProfile picture★★★★★
(14484)
Spongy Iris wrote:
Into the Night wrote:
Spongy Iris wrote:
Into the Night wrote:
Spongy Iris wrote:
M1 and M2 money have several definitions, ranging from narrow to broad.

Nope. They have specific definitions, defined by the Federal Reserve.
Spongy Iris wrote:
M1 = coins and currency in circulation + checkable (demand) deposit + traveler's checks. M2 = M1 + savings deposits + money market funds + certificates of deposit + other time deposits.

Reasonably close to their specific definition.
Spongy Iris wrote:
This money gets printed when people get loans / debt.

No. It is just printed.
Spongy Iris wrote:
Otherwise banks wouldn't know how much to print.

Banks do not print money.


You are being deliberately ignorant again. Banks create / print money when people get debt. That is how it is determined how much to print.

Banks don't print money.
Spongy Iris wrote:
If you get a mortgage to buy property, banks print that money.

Nope. That money comes from depositors of that bank, or from money the bank itself borrowed from someone else. Banks do not print money.


Loans create deposits.

You seem to be confusing minting money with putting money into circulation.

Loans also create withdrawals. So what else it new?


The Parrot Killer

Debunked in my sig. - tmiddles

Google keeps track of paranoid talk and i'm not on their list. I've been evaluated and certified. - keepit
06-12-2020 03:03
Into the NightProfile picture★★★★★
(14484)
Spongy Iris wrote:
Into the Night wrote:
Spongy Iris wrote:
IBdaMann wrote:
Spongy Iris wrote:You are being deliberately ignorant again.

Into the Night is absolutely correct ... and you are a total moron. I might have mentioned that previously.

Spongy Iris wrote: Banks create / print money when people get debt.

Incorrect. Only Congress has the authority to create money, and that occurs specifically through the Treasury who authorizes crediting of that money to the public. The Federal Reserve is the Treasury's interface for accomplishing this by creating and crediting specific accounts as necessary ... and also by instructing the Bureau of Engraving to physically print money as needed.

Your absurd claim that banks somehow engage in counterfeiting is stupid.

Spongy Iris wrote: If you get a mortgage to buy property, banks print that money.

Too funny. You should stop pretending to participate in this discussion?

The banks lend money that they already have, that they have acquired from depositors or from borrowing from other banks.


.


Banks do not lend money they already have deposited.

Yes they do.
Spongy Iris wrote:
Do you know what a Reserve Requirement is oh smart one?

The ratio of deposits a bank must have on hand to make a loan, vs the total deposits or amounts borrowed from other banks.
Spongy Iris wrote:
As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.

A bad idea. History shows why. Borrowing 100% of the money to make a loan is living on tick, and will eventually fail.
Spongy Iris wrote:
It used to be a rule of thumb that if a bank had $1 million in deposits it could lend $10 million. That is a 10% Reserve requirement.

Like I said.
Spongy Iris wrote:
As you can see on the Federal Reserve's website, Reserve requirements are now zero.

Like a said...a bad idea.
Spongy Iris wrote:
It's not counterfeit. It's based on whether or not somebody qualifies for a loan, which is based on how much somebody can sell.

Strawman fallacy.
Spongy Iris wrote:
Congress doesn't screen loan applications.

Strawman fallacy. Pivot fallacy. No one ever said it did.


You don't seem to understand that there is not more savings than there is debt.

If a bank has more debt than deposits, that bank will fail.
Spongy Iris wrote:
A bad idea as you call a 0% Reserve policy, is inevitable. I doubt the Federal Reserve will increase that reserve requirement ever again. But let's see...

Who cares?


The Parrot Killer

Debunked in my sig. - tmiddles

Google keeps track of paranoid talk and i'm not on their list. I've been evaluated and certified. - keepit
06-12-2020 03:04
Into the NightProfile picture★★★★★
(14484)
Spongy Iris wrote:
Into the Night wrote:
Spongy Iris wrote:
IBdaMann wrote:
Spongy Iris wrote:But that's not even the point of this argument, which is that debt creates money.

Nope. Only Congress can authorize the creation of money. No bank can "authorize" the creation of money and no bank can accomplish the creation of money, not by lending, not by anything.

A bank is just like a person. If you hire my son to mow your lawn for $40 and when he finishes you owe him $40. You have now incurred a debt of $40. No money has been created.

Spongy Iris wrote: When a bank makes a loan, there are two corresponding entries that are made on its balance sheet, one on the assets side and one on the liabilities side.

I'm pretty good at accounting. I know how it works.

Accounting does not create money; it helps people make better decisions.

Spongy Iris wrote: The loan counts as an asset to the bank and it is simultaneously offset by a newly created deposit, which is a liability of the bank to the depositor holder.

And the depositor has a symetrical ledger entry of an equivalently-valued deposit credit balanced by an equivalent debit entry to "cash in hand."

Spongy Iris wrote:Loans actually create deposits.

No. Loans create transactions.

.


If your son bought a lawnmower with a credit card from a commercial bank, he would be creating money, when none existed before that.

Nope. That money comes from depositors of that bank making the loan.
Spongy Iris wrote:
The cash would go to the lawnmower seller. Once your son pays off his debt, after mowing some lawns, the cash is destroyed.

Nope. It goes back to the bank he borrowed the money from.
Spongy Iris wrote:
If he gets hit with late fees and or interest, before he can pay all the debt, that goes to the bank's reserves

Nope. It goes into the profit margins of the bank.
Spongy Iris wrote:
Congress creates money when they go into debt to pay for public services and public infrastructure.

Nope. Congress borrows the money when they go into debt. That's what a treasury bond is. A promissory note. They sell these on the open market. The price they pay is the interest rate of the note. If someone accepts that price, they will buy the note, expecting to get paid that interest as payment. If the note goes bad because the government defaults on it's debt, the bond holder loses everything.
Spongy Iris wrote:
No one agency is creating all of a nation's money.

Congress. That is one agency. It is the only agency that authorizes the Fed to create money.
Spongy Iris wrote:
Lots of banks are processing lots of loan applications, or buying government bonds.

Can you explain another way which money can be created?

RQAA. Congress authorizes the creation of money to the Fed, which creates the money. Done.


From the Bank of England's 2014 Q1 Quarterly Bulletin:

"Just as taking out a new loan creates money, the repayment of bank loans destroys money. For example, suppose a consumer has spent money in the supermarket throughout the month by using a credit card. Each purchase made using the credit card will have increased the outstanding loans on the consumer's balance sheet and the deposits on the supermarket's balance sheet. ... If the consumer were then to pay their credit card bill in full at the end of the month, its bank would reduce the amount of deposits in the consumer's account by the value of the credit card bill, thus destroying all of the newly created money."

Economics Stack Exchange

"when banks lend out money, that money is created out of thin air by a accounting journal entry, and the money supply goes up by the amount of the loan & when the loan gets paid off, that money disappears back into thin air and the money supply goes back down which is often also described as "destroying the money""

The United States is not using the Bank of England as the Federal Reserve.


The Parrot Killer

Debunked in my sig. - tmiddles

Google keeps track of paranoid talk and i'm not on their list. I've been evaluated and certified. - keepit
07-12-2020 17:39
gfm7175Profile picture★★★★☆
(1589)
Spongy Iris wrote:
IBdaMann wrote:
gfm7175 wrote: The balance sheet is a financial statement (IOW, a "report"), not a journal or a ledger. There aren't any "entries".

Good catch. I missed this. Of course the ledger is used to capture the transactions. The balance sheet is just a current state, or a "snapshot." I should have caught that.

gfm7175 wrote: ... although I am much more familiar and practiced with the 'accounts receivable' aspect of accounting than I am with other aspects, ...

You work in "Billing."

gfm7175 wrote: I've received it...

That's a credit.

gfm7175 wrote: I've deposited it...

That's also a credit.

You've got to give me credit.


.


A good job fit for GFM.

Indeed it is. It is the skillset that the good LORD has blessed me with, and I am putting it to good use to serve him where he has called me to serve.

gfm7175 wrote:
Pestering people with annoying messages

"Pestering people with annoying messages" is not one of my job duties.
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