Quote from: deisik on July 27, 2019, 04:12:20 PM

Maybe, solid as in reputation?

Sure, but not solid as in there are any tangible assets transferred to the bank in order to obtain the loan or credit.

Quote from: deisik on July 27, 2019, 04:12:20 PM

Okay, so you agree that presumably uncollateralized loans (like credit cards with a nice credit limit) may actually come from deposits, and in this manner you can't say that money for these loans appears out of nowhere. That seems to be a pretty solid conclusion (no pun intended).

I never said that loans come from deposits. I said the bank's reserves come from deposits. The bank can't simultaneously use this money as an asset to secure the credit in the depositors' accounts, whilst also giving it as credit to the loanees.

To go back to my previous example. Lets say I deposit $1000 to a bank. The bank now has $1000 in reserves, and I have $1000 of credit in my account. Lets say you now open a credit card, and they give you $1000 of credit. The bank still only has $1000 in its reserves, but now has $2000 of outstanding credit. New money has been created. If you were to physically withdraw cash, then yes, that cash might come from the cash I deposited to the bank, but the bottom line is still that the bank now has more outstanding credit than they have assets to cover it.

I'm not sure why you are arguing this? It is widely established and fairly common knowledge that banks create money out of nothing when providing loans to customers. Here is an article written by the Bank of England (one of the most important banks in the world, and which most other central banks are based on): https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

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Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrowers bank account, thereby creating new money.

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One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them.

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When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created.