OK whatever buddy. No use discussing something with the illogical.
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I guess the point I'm really making is that banks create money, they don't just lend out existing money.
Loans create the deposits.
You create money as a liability on one side and an asset on the other (which is the loan) and is backed by future productivity.
So for a mortgage they are creating money today from the next 30 years of wages.
This is put out by the Bank Of England and explains it very well.
If you can challenge the mechanism as explained by them, I would like to hear it.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf?
la=en&hash=9A8788FD44A62D8BB927123544205CE476E0165 4
'Money creation in practice differs from some popular misconceptions — banks do not act simplyas intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’central bank money to create new loans and deposits'.
I wasn't talking about loans though and neither were you, we were discussing cash sitting in accounts.
The statement of yours above implies that you can take your money from a bank account and invest it into something.
I'm saying that is not possible in aggregate as the cash from your account, once invested in something, ends up in the account of the person you bought the investment from.
So your statement 'governments don't want cash sitting in bank accounts'
Tell us how you get it out of the bank accounts please.
You can get it out of YOURS but it will end up in another.
Sitting implies long term I.e Governments don't want increased amounts of cash Sitting on term although it does anyway. They want cash circulating in and out of things. You are being overly simplistic. Same when you say banks create money, they don't, well not commercial banks, they create credit. Central Banks create money.
Ok you are certainly changing your arguments but yes makes sense.
If you want an example of overly simplistic compared to what is actually meant;
Governments don't want cash sitting in bank accounts, they want it to be invested into things to create growth'
Glad we got there in the end.
If I ever need a job sounds like I should take your old one.
Yeah just walk in mate, they give out trading jobs to just bout anyone. 🤣
Need to pass the psych test first though, has about an 80% failure rate from the young high achievers that have aspirations to get onto the trading floor.
No change of argument, you just misinterpreted what I wrote.
Enjoy your Sunday.