• They can print whatever they want, but it wouldn't be legal tender. Money production is carefully and closely regulated by the government. It can be done only at authorized centers and using authorized materials.
  • No. They have no need to. They steal what they need from their depositors - it's called "interest". Banks are the only business that makes money without producing a product.
    • Victorine
      The interest is paid to the depositors in return for the use of their money. It's not being paid by depositors to the bank. Banks may charge fees for certain services, but that's not interest.
    • Army Veteran
      Ever hear of a "loan"? Where do you think the bank gets the money to pay this interest to they plant change in the ground so they can grow currency trees? Contrary to the Liberal mindset, money doesn't come out of thin air.
    • Hulk70166
      What really? Which party allows banks to set rules about interest rates on the national debt? If banks charged the government competitive rates the US wouldn't be in such debt.
    • Hulk70166
      Victorine re: "The interest is paid to the depositors in return for the use of their money." -- so if that was true why don't I get interest for my savings account anymore?
    • Hulk70166
      Casinos and the stock market does that too. They make money and don't produce a product.
  • No. And they're only required to have about 10% of your money there available for your withdrawal at any one time:
    • Army Veteran
      That's what caused the collapse of the stock exchange in 1929 and the subsequent great depression. Smaller banks were enjoying the credit they were allowed and used it to invest too heavily in the stock exchange. Once the big banks lured them in, they quietly exited the market, then made a margin call and the economy collapsed like dominoes.
  • Why are these questions under dating?
    • fiachrab
      i piut under the section money matters and dating,i got no choice as i dont know where to put it,theres no sections that say money only
    • Army Veteran
      The top of the page says "SOCIAL SCIENCES ? ECONOMICS". Does it include dating your banker?
    • fiachrab
      no thanks for help though
  • The Federal Reserve Board tells the Treasury how much to print. This is based on the amount of assets are in the system. About 10% .
  • The Federal Reserve (Central Bank), can print money as it pleases, but it doesn't because it will then devalue, and they won't get enough labour from the people. Money is printed in accordance with how much people are willing to loan, remember this is a debt society. Anyone can make their own money, but it has to be looked upon and accepted as legal tender in order for people to use it. Then it will go into the system as any other IOU, but the likelihood of them allowing you to do this, and upsetting the cartel is slim.
    • Army Veteran
      You need to educate yourself on "fiat" money. The Federal Reserve has been printing fiat money since 1913. This was the reason they did away with gold and silver as something to give the currency intrinsic value - and it's totally against the Constitution. The idea even back then was to run America into bankruptcy by issuing worthless currency.
    • Creamcrackered
      I know it's no longer backed by Gold and silver 1465. In 1898, Alfred Russell Wallace wrote a paper advocating a pure paper money system, not backed by silver or gold, which impressed the economist Irving Fisher so much that he dedicated his 1920 book Stabilizing the Dollar to Wallace. The Goldsmiths got so use to IOU's they realised people never came back for their gold and silver.
    • Hulk70166
      1465 - except that there isn't enough gold to go back to the gold standard. Don't worry though, the US is safe as long as the world believes the US is a functioning country. If we were attacked by an alien invasion or a meteorite that took us out, we'd be in trouble.
  • nice shot
    • lensemark73
  • Only the treasure can print money. Its prints what the Federal Reserve tells it to. The Federal prints 10% of all bank assets. That's how new money entered the system. The Fed the sends money to the bank via armored car.
  • They don't need to print money they create it out of thin air. Banks are required to have only 10% of a loan on hand. They create the rest of the loan on a computer screen. The borrower must pay the loan off including interest. A loan of $1000 requires $100 in cash. $900 does not exist. The bank or lending institution collects all $1000 plus interest.
  • not legal
  • They cannot, that would be counterfeiting and it's a crime.
  • Quote:- People put their money in banks. Banks then lend that money out at interest – either to consumers, or to entrepreneurs willing to invest it in some profitable enterprise. True, the fractional reserve system does allow banks to lend out considerably more than they hold in reserve, and true, if savings don't suffice, private banks can seek to borrow more from the central bank. The central bank can print as much money as it wishes. But it is also careful not to print too much. In fact, we are often told this is why independent central banks exist in the first place. If governments could print money themselves, they would surely put out too much of it, and the resulting inflation would throw the economy into chaos. Institutions such as the Bank of England or US Federal Reserve were created to carefully regulate the money supply to prevent inflation. This is why they are forbidden to directly fund the government, say, by buying treasury bonds, but instead fund private economic activity that the government merely taxes. It's this understanding that allows us to continue to talk about money as if it were a limited resource like bauxite or petroleum, to say "there's just not enough money" to fund social programmes, to speak of the immorality of government debt or of public spending "crowding out" the private sector. What the Bank of England admitted this week is that none of this is really true. To quote from its own initial summary: "Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits" … "In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money 'multiplied up' into more loans and deposits." In other words, everything we know is not just wrong – it's backwards. When banks make loans, they create money. This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There's really no limit on how much banks could create, provided they can find someone willing to borrow it. They will never get caught short, for the simple reason that borrowers do not, generally speaking, take the cash and put it under their mattresses; ultimately, any money a bank loans out will just end up back in some bank again. So for the banking system as a whole, every loan just becomes another deposit. What's more, insofar as banks do need to acquire funds from the central bank, they can borrow as much as they like; all the latter really does is set the rate of interest, the cost of money, not its quantity. Since the beginning of the recession, the US and British central banks have reduced that cost to almost nothing. In fact, with "quantitative easing" they've been effectively pumping as much money as they can into the banks, without producing any inflationary effects. What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow. Government spending is the main driver in all this (and the paper does admit, if you read it carefully, that the central bank does fund the government after all). So there's no question of public spending "crowding out" private investment. It's exactly the opposite. Why did the Bank of England suddenly admit all this? Well, one reason is because it's obviously true. The Bank's job is to actually run the system, and of late, the system has not been running especially well. It's possible that it decided that maintaining the fantasy-land version of economics that has proved so convenient to the rich is simply a luxury it can no longer afford. But politically, this is taking an enormous risk. Just consider what might happen if mortgage holders realised the money the bank lent them is not, really, the life savings of some thrifty pensioner, but something the bank just whisked into existence through its possession of a magic wand which we, the public, handed over to it.
  • They can't do it. The Fed pays for those securities by crediting funds to the reserves that banks are required to hold.
  • no the fed does that

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