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> all the depositors go at the same time to claim their money at the bank.

If the bank did not create money, and simply loaned out the deposits, the depositors would still not find their money there when they run to get it.

Banks loan out a multiple of the deposits, meaning they create money.

Your theory that FRB doesn't create money is a fringe one, which should give some pause. What should also give pause is the gold example, which doesn't apply, and the false notion that bank collapses from runs only happen when they use FRB.




Can't reply to your comment below so will do it here.

"Do banks really create money out of thin air?": https://www.weforum.org/agenda/2015/06/do-banks-really-creat...

"...The phrase “banks create money” forms part of the popular discourse, but it conveys an erroneous representation of the banks’ role in the money creation process..."

"...Without the correct understanding, the misguided belief that banks create money out of nothing will continue to influence models of the financial sector and monetary policy interventions..."

"...The traditional view adopted in the money supply debate is that banks create bank money by granting loans. This explanation is then extended to suggest that banks thereby create money out of nothing. However, this is an inadequate caricature of the process of bank money creation..."

"...To an outsider, it appears as if by recording an asset account entry connected to the buyer and by recording a corresponding deposit entry, the bank has created money out of nothing; this is the illusion of the bank having created money..."

"...But this is only the prima facie appearance and not the truth of the matter because the outside observer has neglected to acknowledge that the deposit value records the value-for-value exchange conducted through an underlying transaction. In reality, the seller no longer has a house and the buyer now has a house..."


Think about this carefully. The bank did not create wealth. It created money. The balance sheet of the bank did not change.

The painter created the wealth.


I feel you are getting into the definition of the role of the Bank as intermediary as stated in the latest link above, and to be fair the definition of what Money depends on what is role in the economic transactions.

Bankers themselves don't describe like that: "Economists frequently assert that banks can create money out of nothing. Bankers have a different opinion: for every loan they need to attract money. And, strangely, they are both correct. How can this be reconciled?"

ING: "The money creation paradox" https://think.ing.com/uploads/reports/Money_paradox2.pdf

"Why don't Economists understand money?": https://youtu.be/EObtwxpDSzk

Please see particularly as of this point (Video at correct time): https://youtu.be/EObtwxpDSzk?t=804

"If You Don't Understand Banks, Don't Write About Them": https://www.forbes.com/sites/francescoppola/2019/09/17/if-yo...


"The Money Multiplier and the Myth that Just Won’t Die…"

https://www.pragcap.com/the-money-multiplier-and-the-myth-th...

"Banking and the Laughable 'Money Multiplier' Myth"

https://www.realclearmarkets.com/articles/2016/06/29/banking...


That went off the rails with:

"Money is money and credit is credit. They are not the same thing, they are completely different financial animals."

and:

"Only the Federal Reserve can create money"

How does the author imagine we had money before 1914?

Perhaps the author and you would be interested in reading "Monetary History of the United States" by Friedman, an actual expert on this topic.




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