Message from Jeremy in Athens #the-long-walls_immigrants
You also have the money multiplier, a regulation banks are subject to.
the 10% reserve requirement?
that what you refering to
or something else?
So, what they have on deposit, they're allowed to loan up to 10x that amount.
A reserve requirement would be your securities.
true, but when they take in say $100, they don't isolate $90 and loan that out
what they do is create 900 dollars out of thin air, from the reserve of that $100
No, they're just allowed to loan up to that amount to minimize liability.
the money in essence "comes into existance" upon creation of a loan
There was actually a court case on this with Jerome Daly
To some extent, but think about how most people take out loans, especially businesses and so on. I know it sounds rather Keynesian, but up to this point for every dollar of debt we've taken on, approximately 8 dollars of productive value have been added to the economy. Think about a local store down the road that may have initially taken out a $100,000 loan, but has a marginal revenue of about half a million, perhaps more. What if they want to expand, in doing so taking on debt, in which the opportunity cost is justified, as there is no more of an efficient allocation.
I'm just using that as a rough example, but most debtors do not take on debt without accounting for opportunity cost - it's behavioral economics 101.
So, the expense accrued over time must be justified.
The question is whether or not the scarce resources are allocated efficiently, and in private markets that is the case.
at this point I dont think we're actually debating just stating different facts
everything we're saying is pretty much demonstrably true
It really doesn't matter whether or not what you're saying is true, as it leads one to the same conclusion, regardless of how you get there. Public debts, on part of excess government expenditure, is a negative in my view, supported by the observation of inefficient allocations and corruption, with heavily unionized labor fitting nicely into both, while simultaneously preventing private markets from ever arising in place of where government operates, losing out on growth potential and expanding State power, even though further debt further solidifies our ability to borrow more. Technically, we can expand our national debt limitlessly, unless everyone decides to shoot themselves in the foot and collapse their own economy, or speculators enter the market, which would likely happen inevitably, but we're far off that mark. It'd take another century of borrowing before this would occur, and that's implying the economy doesn't grow over that period of time.
That's the benefit of having a reserve currency by running current account deficits, which can *only* be sustained within nations that preserve property rights, not violate them (yes, I'm referencing the PRC as a regime that'll never fit the requirements), BUT there are also negatives to be observed, as I mentioned before. You have the issue of increased evaluations of USD, so you end up with trade deficits.
What he said. Maybe
Yeah, it's all the same in the end anyway.
do I get a pepe stamp on my passport
Welcome to Kekistan...
Now... To get rid of that ACA and address the over $1 trillion in annual macro-level inefficiencies due to the government creating oligopolies within the healthcare industry by restricting market-entry and not allowing cross-state competition.
Go to <#613767975614283832> or any of the other xeno channels. Your links will embed there
Ahah, there we are.
Ah, so the fresh meat is finished processing