As I said before, I don't understand your example of BMW lending cars, so let's keep it simple and proceed now from bitcoins (apart from gold). FRB is irrelevant here, and to make things even simpler, let's assume there are no reserve requirements at all (a good assumption since there is no Central Bank to begin with). Could the banks then create bitcoins out of the thin air just like they are said to do with fiat?
No they can't create bit coins. But they can still create credit money
But the credit money created by today's banks is the same fiat that is emitted by the Central Bank. And do you know why?
Haha we're back to this again? Thought experiment: if Central Bank suddenly stopped printing money, would the money supply still increase? Or would it remained capped?
Thats basically the argument we're having
Back to what? Now you seem to be trying to avoid cornering at all means. Banks that create money through credit are a Central Bank's proxies. And if the Central Bank would somehow want to stop for some fancy reason its currency from circulation, no bank would be able to create money in the form of this currency "out of the thin air". I think I made it pretty evident. Central Bank money printing is a metaphor, credit money is just another way of emitting money into circulation by a Central Bank through its proxies (though there are other ways as well).
You are only talking about commercial banking. Man why don't you read what I posted about shadow banking and see if you still come to the same conclusion. Otherwise just agree to disagree. Stick w your neoclassical view
Why do you send me somewhere to read something? Couldn't you explain your point yourself without outside references? Did I ever ask you in my posts to go read anything besides just my posts? I can explain in layman terms everything that I talk about since I understand what I write. Can you say the same about yourself?
Hmmn, I tried to explain it in layman's terms but you kept saying you don't get it. I thought something common like car finance you would understand but apparently not. There are non-commercial banks where credit money is being created. In fact before the 2008 GFC more money was from this shadow bank sector than commercial bank sector. Like other neoclassicals, you are missing half the picture. That's why their models don't work