Federal Reserve Bank of New York Quote

"Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower's IOU."

by:	Federal Reserve Bank of New York
Source:	I Bet You Thought, p.19 (1977) Published by The Federal Reserve Bank of New York
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Categories:	Economics, Fed, Money
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There are only two possible economic systems: barter and slavery, In a barter system, you exchange production for production. In a slave system, you exchange production for money which is non production. "Money expropriates wealth." said the late Merrill Jenkins, Monetary Realist, The link that follows is not mine and it contains no advertising, It deserves wide circulation. www.morpix.biz/dc Site owner mastered the works of Merrill Jenkins, Get 6 of Jenkins books for free here: www.morpix.biz/x15 I endorse no religious material found there. Another party made that site,  -- Dave Wilber      1
Dah! or is is it duh! Why does liberty-tree print such doggerel? Of course it is absolutely true but if you don;t want the checking account balance just take the currency or the car or whatever! Absolutely true but thumbs down for thinking the dumbest quote ever.  -- Waffler, Smith      1
Dave, very well said. Were's the beef? The fluff is failing.  -- Mike, Norwalk      1
It is so plainly described that it almost seems innocuous. Waffler's ignorance knows no bounds apparently. The statement exposes the lie that banks 'lend' money they already have -- they don't. When someone goes into a bank to get a 'loan,' they sign a promise-to-pay with interest, and in exchange, 'poof' the money is in their account in exchange for their IOU. In other words the money did not exist until the 'borrower' signed an IOU. And guess where the 'money' goes when it is paid back? Well, other than the interest paid, the rest just 'poofs' out of existence. Waffler misses the point that liberty-tree has obviously tried to make -- that every dollar is 'created' by banks when someone 'borrows' it -- that is how currency is issued and how it is destroyed. Every single dollar in circulation whether in 'cash' or checkbook money has been borrowed -- and when loans get paid back the money supply contracts resulting in deflation. When money is 'borrowed' (well, it isn't exactly borrowed is it, it is created the instant the IOU is accepted) then the money supply expands resulting in inflation. This was impossible with hard currencies. Waffler says, 'so what'? Well, wouldn't you say that whoever has the 'right' to simply create deposits in a bank account AND charge interest would have an incredible amount of power. AND if this bank could simply create 1 trillion dollars because Congress wants it, then they would REALLY be powerful -- more powerful than Congress even? So Waffler, what the hell are YOU talking about?  -- E Archer, NYC      2
To add to Archer's timely comments, when a bank makes a loan, it is carried on their books as an asset. Figure that one out.  -- jim k, Austin, Tx      1
For some answers: www.moneyaswealth.blogspot.com  -- MoneyAsWealth, Minneapolis, MN
I told you it would raise the rabble. I assume now of you guys have ever been inside a bank vault. Instead of giving the borrower the checking account balance they could have walked into the vault and given them currency. Obviously Jim K and Archer know nothing about accounting or finance. Your net worth if you have any includes legal debts owed to you. Legal debts owed to you are an asset. Legal debts you owe to someone else are a liability. The bank has an asset when you take a loan out and you have a debt or liability. You guys really are about useless!  -- Waffler, Smith      2
Waffler is as useful as tits on a boar. The only currency we have ever had was gold and silver coins. All it took to enslave the world was to convince the majority that currency is paper. All it takes to keep us enslaved is to keep dolts like Waffler ridiculing and punishing the few who seek their freedom.  -- Anonymous
-- Anonymous
As stated severa; times. Waffler is almost as useful as tits on a boar!  -- Winston Smith, Anytown. Anystate      1
I think it is a real shame that our supposed government feels that it has to treat us like we are not worthy of being treated as human beings, but as slaves. I used to think my daughter was just expecting too much with getting treated fairly at her job, but now I don't blame her. I feel like I'm always running to catch up with everything going up in price except my pay check. The gov. never wants you to catch up and they never want you to be able to get social security.  -- linda, berea

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