[cut sifted ephedra sinica]

Good questions about Amy's actual currency.

In real life, Angus Bank would only keep enough of Amy's FRNs such that they could cover cash withdrawals, and then they would send the rest to their regional Federal Reserve Bank. If they later needed more FRNs, they would request some back from the Federal reserve as necessary, with all of the proper accounting done digitally. All other subsequent transactions with the other borrowers and banks would be via bank checks and digital accounting.

For illustrative purposes, though, you could envision that all borrowers wanted to be paid in cash, so that in the end, 100 FRNs ended up at Angus Bank, 90 at Beta, and 810 at Cantina. Then, Cantina would send some of them to the Federal Reserve.

[PZXjoe]

How could they physically loan out Amys "money" if the total "money" created via loans is 10x her deposit?

The problem in that analogy IMHO, is that the original $1000 couldn't have just been FRN's if FRN's is what was loaned into existence because of fractional reserve lending.
ie something of substance had to exist first, that was then expanded upon via the money multiplier.

No, the 10x money supply appears digitally as demand deposits. See my previous post as to where the actual paper FRNs would be.

As to your second point, FRNs are not loaned into existence. Paper bank checks and digital entries are what is "created".

[pumpineemob]

An asset is not limited to money. A note or a mortgage becomes an asset.

Think double entry bookkeeping. When an asset is expended one is received. Take out a $100k mortgage, the $100k comes off the asset side of the bank and is replaced by a $100k asset called a mortgage and a $100k asset called a note. Then the bank bundles these and sells them for 1-2% over the asset value.

The thing is, at the end of the day, every day, the banks books balance assets against debits, and neither has to be considered a negotiable instrument called a FRN. You are used to thinking "money of exchange" while they are dealing with "money of account".

[lalffibra]

How could they physically loan out Amys "money" if the total "money" created via loans is 10x her deposit?

The problem in that analogy IMHO, is that the original $1000 couldn't have just been FRN's if FRN's is what was loaned into existence because of fractional reserve lending.
ie something of substance had to exist first, that was then expanded upon via the money multiplier.

By definition, Amy could not have "free and clear" FRNs. They are loan notes. Somebody had to borrow from the federal reserve for this to happen. I think you also need to look at other sources than the public for bank reserves. Does not the federal reserve lend money to banks cheaply? This is really no different from Amy placing FRNs into an account for interest. Injecting "liquidity" into the system is the fed lending cheaply to banks.

Here is the catch- what is loaned must be returned with interest.

[enentique]

Now, when you pay off the note, you extinguish the money supply borrowed (principal) leaving only the interest as the new and immortal money. The growth of interest amounts make up the longterm and permanent growth of the money supply. All else is temporary.

The interest is not 'new, immortal' money. The interest can only be paid by robbing Peter to pay Paul. The interest paid back to the bankster comes out of the pool of money that has been loaned into existence. Therefore in this crazy game of musical chairs, if all the loans were paid back there would not be a dollar in existence and no money to pay the interest. There is no primordial money but gold and silver coinage.

[orerviche]

The interest is not 'new, immortal' money. The interest can only be paid by robbing Peter to pay Paul. The interest paid back to the bankster comes out of the pool of money that has been loaned into existence. Therefore in this crazy game of musical chairs, if all the loans were paid back there would not be a dollar in existence and no money to pay the interest. There is no primordial money but gold and silver coinage.

You misunderstood my intent. When borrowed money is paid off, the loan amortizes- dies. A mort-(death)-gage is a loan with death programmed into it. Ther interest being pais is above the principal being returned. The payment of principal kills the borrowed amount on the note... but the interest survives the transaction. That is what I meant by "immortal". It is not snuffed by repayment, but continues as an increased money supply.

[AricGoffgog]

You misunderstood my intent. When borrowed money is paid off, the loan amortizes- dies. A mort-(death)-gage is a loan with death programmed into it. Ther interest being pais is above the principal being returned. The payment of principal kills the borrowed amount on the note... but the interest survives the transaction. That is what I meant by "immortal". It is not snuffed by repayment, but continues as an increased money supply.

I see what you were getting at. I thought you meant it as being 'immortal' to the money supply itself. It is not an increase in the overall money supply, just so we have understanding. It is an amazing thing to contemplate that we use debt as money in this crazy world. Debt is the complete opposite of money to my understanding.

As far as this system of world wide slavery is concerned, I like to let the perpetrators lay it all bare in their own words.

"Banking was conceived in iniquity and was born in sin.
The Bankers own the earth. Take it away from them,
but leave them the power to create deposits,
and with the flick of the pen they will
create enough deposits to buy it back again.
However, take it away from them, and
all the great fortunes like mine
will disappear and they ought to disappear, for
this would be a happier and better world to live in.
But, if you wish to remain the slaves of Bankers
and pay the cost of your own slavery,
let them continue to create deposits." Sir Josiah Stamp
(1880-1941) President of the Bank of England in the 1920's, the second richest man in BritainSpeaking at the Commencement Address of the University of Texas in 1927

[Edwardthe_third]

Gold and silver are intrinsically valuable and therefore stand the test of being money. Debt is intrinsically fraught with risk and is a liability instead of an assett. These sarcastic bastards have done the same thing with money as they've done with fouride and other dangerous toxins. When they were berated for poisoning the countryside with poisons from aluminum smeltering and nuclear processing, they laughed and turned around and put the shit in our water supply. We must consider the fact that they have done the exact same process with debt. We are surviving in a semi-death, a zombie existence by being forced to use this toxic waste as a money supply.

Just think what we could be if we were free of this monstrous vampire that is sucking the vitality out of our lives.

[11Woxsepmoomo]

The interest is not 'new, immortal' money. The interest can only be paid by robbing Peter to pay Paul. The interest paid back to the bankster comes out of the pool of money that has been loaned into existence. Therefore in this crazy game of musical chairs, if all the loans were paid back there would not be a dollar in existence and no money to pay the interest. There is no primordial money but gold and silver coinage.

Wrong answer again.

Interest is paid by spending (an action) using a thing called money that was earned via your labor. Money is spent over and over and it came from the original loan money.
The only place where money can be extinguished is at the bank that that holds the loan and erases the principal paid against the loan amount. The banker spends the interest portion back into the economy and once he spends it, it is out "there".

[slimsex]

Wrong answer again.

Interest is paid by spending (an action) using a thing called money that was earned via your labor. Money is spent over and over and it came from the original loan money.
The only place where money can be extinguished is at the bank that that holds the loan and erases the principal paid against the loan amount. The banker spends the interest portion back into the economy and once he spends it, it is out "there".

You say my answer is wrong. I am often wrong and need to be corrected. Your answer does not show 'where' my answer is wrong. Your statements do not negate my statements. You say the bank spends the interest back into the economy but if all the principle in the system is destroyed then there is no money to pay the interest. We are fighting a battle against everyone else to keep solvent and someone must loose. If someone is loosing then we are all loosing by being bound in such a system.

So where, specifically am I wrong? I wish to have a clearer understanding of this system.

[RussellPG]

You say my answer is wrong. I am often wrong and need to be corrected. Your answer does not show 'where' my answer is wrong. Your statements do not negate my statements. You say the bank spends the interest back into the economy but if all the principle in the system is destroyed then there is no money to pay the interest. We are fighting a battle against everyone else to keep solvent and someone must loose. If someone is loosing then we are all loosing by being bound in such a system.

So where, specifically am I wrong? I wish to have a clearer understanding of this system.

I'm sorry, I just scanned your response and assumed you were making the standard claim that the money for the interest had to come from a source outside of the original loan.

The money to pay the interest for any given loan does come from the loan amount itself.

And you are correct that if all the loans were paid there would be no money.

But if all the loans were paid there would be no need to pay interest as there would be none owed.

[levitratestimon]

The interest is not 'new, immortal' money. The interest can only be paid by robbing Peter to pay Paul. The interest paid back to the bankster comes out of the pool of money that has been loaned into existence. Therefore in this crazy game of musical chairs, if all the loans were paid back there would not be a dollar in existence and no money to pay the interest. There is no primordial money but gold and silver coinage.

This is exactly what I was trying to say. Thank you for putting it into words. The other thing I want to say is that interest is not necessarily paid back via labor. This is especially true in today's world...interest is often paid back by borrowing.

dys