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Interesting question. Ok, back to the basis (when a buiding shake let's examine the basement!). Money is, IMO, a promise of work. Already done (or to be done in future). I explain. Every layman's economic book start describing a barter and how is simpler to use an exchange mean as...

Good point. But but isn't there one little difference between your case and FRL? If something goes wrong, and a huge amount of lending do not return back, only bonds are affected, not circulating. So deleveraging affect savings, but not directly real economy, because circulating is unaffected...

Very interesting quotes and very interesting discussion. Thanks to all who wrote, especially traden4Alpha, jueco, trefoil and antitrust.

Maybe I'm simply a ignorant fanatic, but why FRL should help a poor to become richer? I'm sure it is true that a non-FRL system will make credit more difficult to obtain. But we can find a way to make this relative more scarcity hits only who use that money to consume or speculate. The only...

Sure. But only if you can lend deposits. I'm saying a bank should not allowed to. If some of that 10,000$ is converted in long-run deposit (say bond, as you correctly noted CD can be reedemed before due date), then that part can be lent again. It will not create money, because because you have...

Just found elsewhere here in ET a link to very interesting article that could be well connected to this thread: http://www.nakedcapitalism.com/2009/02/steve-keen-roving-cavaliers-of-credit.html Thanks to sobemark to posting (quoted here...

Not follow. I buy a CD or a bond. It will have a due date. My money is blocked into it until due date. Any $$ of bond that the bank is lending is a $$ I gave to it. No money is created from thin air. If they lend it for a longer period, that's a fraud (or at least, mismanagement). If they lend...

In my opinion, from savings specifically assigned to long-run (as today we do with bonds or CD or any kind of financial "investment". Of course, any investment should have its market and should be sold/bought before due date). The only positive effect of FRL system is to multiply interest rate...

Which country are you speaking of? Seems the description of my country (Hollywood sells a different image of USA). Before measures like biometric passports, introduction of which pushed me to let someone else travel to US, I longly travelled in the South and New England States, and a little in...

Interesting point.... Sometime I forced to believe two parties systems are THE system all (?!) wants, as media and politicos always repeat (until worn-out) in my country... Sometime I cynical believe it is because seems the best method to subdivide moderats... and changing all thus nothing...

At best of my knowledge, you can add almost all central banks of European Union. This means ECB seems to be private, too (because its shareholders are national central banks, each one with its own shareholders). Funny part seems that one of BCE shareholder is Bank of England (with 12.5%), which...

Thank you very much for your explanation. I was lurking around here for a while, and I found a lot of interesting posts in this forum. IMHO this one is one of the best, because it add simplicity to good contents, so it worth my first reply here. Maybe sometime media will become such...