I don’t understand. If you

I don't understand. If you agree that a single bank cannot create credit "out of nothing" (as some claim) why do you rush to their defence? Why not join me (and us) in condemning such currency cranks for spouting nonsense?There has long existed a textbook model which shows how the banking system (as opposed to a single bank on its own) can use a sum of money deposited in one bank to lend out many more times than this (through most of this sum being redeposited again and again in other banks). But this is still not "creating money out of nothing" since if a bank doesn't receive one of these re-deposits it can't lend more. In fact, the expanding bank loans depend on deposits expanding. Both expand together. So, in this model total loans are not, and cannot be, greater than total deposits.The system you describe involves the central bank (in this country the Bank of England) and  wouldn't work without it. Also, it concerns all payments in and all payments out and not all payments out are loans. But nobody denies that a central bank can create money by a keyboard stroke. But this doesn't increase the amount of wealth in existence, merely more claims on that wealth. The danger here is that if too many such claims are created then this will lead to inflation (depreciation of the currency's purchasing power).In any event, it takes two to make a bank loan and at the moment, with the capitalist economy in the middle of a slump, there isn't so much demand for bank loans as before, no matter how much money banks might have or be able to obtain from the money market or the Bank of England.In passing, I don't think Mervyn King would agree with your interpretation of what "quantitive easing" is or its purpose. But there's a separate thread on this here:http://www.worldsocialism.org/spgb/forum/general-discussion/why-hasnt-quantitative-easing-caused-inflation