Spot the error

[MMMark]

Sat. 10/04/24 10:10 EDT
.post #65

[url=Spot the error - #9 by polskash]

@polskash

[/url]Is it that merely moving money from an asset to a bank account causes inflation which would not occur in the absence of fractional-reserve banking?

Nope.[url=Spot the error - #10 by Smiling_Dave]

@Smiling Dave

[/url]just a guess, was the fed printing money wildly before he said that?

Yeah, I don’t buy Bernanke’s description of money growth as “pretty moderate” either…but that’s not the error.[url=Spot the error - #11 by DrSammyD]

@Sam Armstrong

[/url]So when you take your savings out of a risky asset and put it in a bank, somebody gives you the money for that asset. The economy on net doesn’t gain any money supply. The money had to come from somewhere so (assuming the Fed didn’t pay you for your asset) somebody used already existing money to exchange for your risky asset. Therefore the money data wouldn’t grow because I sold a risky asset and put that money in the bank. Is that about right?

Bingo!

This blogger also spotted Bernanke’s bullshit.

@EScroogeJr

A risky asset is not a mattress that you can take your savings out of. In order for you to generate some sales proceeds to put in the bank, you must find a buyer for your asset, and that buyer has to take the same amount of money out the bank, either in the form of cash, or as credit. … It follows that the buyers of those securities had to remove cash from the bank at least at the same rate as the rate at which sellers were deposing their cash proceeds. So these transactions, which actually indicate nothing more profound than changes of ownership, cannot explain the growth of MZM. The reality is that one 2008 dollar is worth 80 cents of 2007 money because of overproduction of dollars by Bernanke & Co.