patrick.net

"Actually, get this: It is a liability...credit...an IOU."

yes, I can read a balance sheet.

"They did not create the money being used, the Fed did and the bank has to scrounge it up just like you and I have to to make good on our financial obligations."

No, you're wrong here (as I was wrong about our savings). Fractional reserve lending does in fact create real checking account money. I put $100 into my checking and WFC can give you $88 of it as a loan that you deposit in your checking. Boom, there's $188 of M1 in the system, with no Fed input at all.

Boom, there's $188 of M1 in the system, with no Fed input at all.

Nope. The Fed still has input in their supervision and regulation operations of the member bank.

shrekgrinch says

And the greenbacks all said 'United States Note' not 'United States Dollar'. It would say on the obverse who many dollars it was in value. 'Dollar' is a measurement unit of value. The 'note' is the financial instrument that has legal tender qualifications as official United States currency as denominated in dollars.

Thanks! You're making my point. Greenbacks were "United States Notes" issued directly by the government, not "Federal Reserve Notes" that are created by the Fed from government debt. We did quite well economically after the civil war, for many years.

Old Abe avoided us going deep into debt with Europe to finance the War.
shrekgrinch says

Caught another of the ignorant.

No, they don't create money. They only create CREDIT. The federal reserve creates money if the bank needs it (and technically, only as last resort) in order to operate.

I suggest you learn how shit actually works, not the buzzwords like 'fractional reserve'.

Credit Money IS Money. What's the difference? A bank giving you a $900 credit line based on somebody else's $1000 deposit is $900 any which way you slice it. The vendor sees both USD and your credit as being the same. Now there is (at least) $1900 in the system, and even more will be created when the vendor deposits the $900 he got from you.

shrekgrinch says

No, that is not what you were talking about in reference to my quote, which was in reference to what you quoted: Basically bullshit about only Congress being allowed to coin money and Congress not allowed to print money. Nothing in there was about your 'ideal way things should be'. You may have mentioned it elsewhere, but not there.

I said it's claimed by those who don't want the USD directly printed by the Treasury that Congress can only "Coin Money" and therefore we need the Fed to print dollars, and I'm trying to explain why this ISN'T true, historically and by virtue of the language and spirit of the Constitution.

Troy has a great link above that provides evidence that the word "Coin" can and has referred to "coining" paper money during the timeframe when the Constitution was adopted, in both Holland and Britain.