tag:blogger.com,1999:blog-2362028751907731562.post2813430160620344360..comments2011-08-06T16:29:42.800+01:00Comments on Wheatonomics: Creation of bank creditChaffSorterhttp://www.blogger.com/profile/12019920621121918593noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2362028751907731562.post-2613431831669670832010-09-17T10:49:54.391+01:002010-09-17T10:49:54.391+01:00Are you asking where I live? Do you know Jay, the...Are you asking where I live? Do you know Jay, the other commenter? Quite close to him.ChaffSorterhttps://www.blogger.com/profile/12019920621121918593noreply@blogger.comtag:blogger.com,1999:blog-2362028751907731562.post-13134213193703326952010-09-16T12:55:27.904+01:002010-09-16T12:55:27.904+01:00ChaffSorter, where are you?ChaffSorter, where are you?Robert Horwoodhttps://www.blogger.com/profile/13695223777413262419noreply@blogger.comtag:blogger.com,1999:blog-2362028751907731562.post-74978320029680135962010-09-09T13:31:11.830+01:002010-09-09T13:31:11.830+01:00"They are now entirely reliant upon Mr Smith ..."They are now entirely reliant upon Mr Smith to pay them money in order to get their 10,000 shillings back".<br /><br />This is the case when any bank makes a loan - there's always a risk of default.<br /><br />"As the film points out, it is very easy for IBoS to store an entry in a computer saying that Mr Smith now has a deposit of 10,000 shillings of bank credit. They seem to be getting something for nothing. But what we see above is that the film omits to mention what that entry actually means, namely that it obliges the bank to transfer money at Mr Smith's request".<br /><br />This is self-evident - so long as one is only looking at one bank in complete isolation. But that is totally arbitrary and artificial. In the real world, taking the economy as a whole 100,000 new shilings have been created out of thin air and spent into circulation. Or, to put it another way, the IBoS has added that amount to the aggregate money-supply.<br /><br />Your purported rebuttal of Grignon's argument is invalid.Robert Horwoodhttps://www.blogger.com/profile/13695223777413262419noreply@blogger.comtag:blogger.com,1999:blog-2362028751907731562.post-1385147053237979122010-09-08T21:18:58.014+01:002010-09-08T21:18:58.014+01:00A criticism of point 6 was covered in an entry in ...A criticism of point 6 was covered in an entry in Steve Keen's Debtwatch blog some years ago. Damned if I can find it now.SpiritSkillhttps://www.blogger.com/profile/12225172385830110611noreply@blogger.com