ALB wrote:Yes, if you define

October 31, 2017 at 8:51 pm #87029

Participant

ALB wrote:

Yes, if you define bank loans as money

I think everyone is. Perhaps this is the key point? I take a loan out from a bank (otherwise known as "borrowing money") and can use it to buy good and services, pay taxes, whatever without ever withdrawing it as cash.

Quote:

then in making a loan a bank is ceating money (by definition). If they extra loans over and above those being repaid then they expand the "money supply" (by definition).

Well then we agree? With me, Varoufakis, Wikipedia and the encyclopedia britannica.

Quote:

But the question remains: where does the money to make the loans, and the extra loans, come from? Is it simply conjured up out of thin air or is it money that the banks have borrowed from depositors, other banks and financial institutions, and/or the central bank?

It's partly conjured up out of thin air, and partly money that the banks have borrowed from depositors, other banks and financial institutions. They do this because they have to meet their reserve requirement.

Quote:

I don't think Zeitgeist is a reliable source of information on how banks work. Maybe they have learnt something in the meantime, but at the beginning they were out-and-out thin-airists. See:http://www.worldsocialism.org/spgb/socialist-standard/2000s/2009/no-1253-january-2009/banks-money-and-thin-air

I was just making the point that the Britannica makes the same point as Zeitgeist. Look, I'm more than happy to be wrong and I've been looking around for any sources that back up what you're saying, I just haven't found any and youv'e not offered any. All I've seen is newspaper clipping proving that banks borrow from other banks, which was never in dispute.